Financing Higher Education Institutions: Experience of the Jordanian Public Universities

Abstract

This paper investigates the financing options available to the public Higher Education Institutions (HEIs) in Jordan. By referring to the extant literature as well as to the legislative framework in Jordan, a quantitative research instrument is designed for collecting data over five years (2009-2013) from the financial departments of 10 Jordanian public universities. The results suggest that public universities are significantly dependent on internal sources of finance rather than external ones to back their ongoing operations. On average, 77% of the total revenues of HEIs are generated from tuition fees, whereas governmental subsidies make around 13% of their total revenues. The findings of this study reveal that the administrators at the public HEIs experience fundamental challenges to secure sustainable sources of finance, namely: the limited operational income capacity generated from research, consultation, and teaching activities; the irregularity of the received governmental aid; and exhibiting shallow and modest investment strategies. The study reports significant associations between the universities’ size, age and location and their revenue structure. There are implications to the policy makers and regulators in the HE sector since the ramifications of the findings are intense on the HEIs, not only because their advance is pulled back, but also because their survival on the long run is challenged.

Key words: Finance Options; Revenue Structure; Public Sector Accounting; Jordan; Government Subsidy; Public Universities.