ISTANBUL - Referans
Only one-third of Turkey's foundation universities balance tuition and expenditures per student. Meanwhile, rectors continue to debate the financial structure for Turkey's version of the private university.
“It is not just for all the income of a university to be generated from students. This is against the founding philosophy of the universities,” said Tahsin Kesici, the rector of The Turkish Union of Chambers and Commodities Exchanges University of Economics and Technology, or TOBB ETÜ.
“The greater burden is on the foundation supporting TOBB ETÜ, as the university does not aim to profit,” said Kesici, whose university ranks second in annual expenditure per student with YTL 19,000.
Annual tuition and fees for students at foundation universities, which are universities established by private foundations, range from YTL 5,500 to 30,000. The average potential annual income from tuition for each university is YTL 176.3 million.
According to Article 17 of the Private Universities Regulation, the foundation is required to pay for the university's infrastructure and at least 20 percent of current expenses. While some foundations meet almost 80 percent of current expenses, some cannot cover even 20 percent.
“If you guarantee sustainable development of the university, it is not right to collect the whole amount of the budget from only the students,” said Tosun Terzioğlu, the rector of Sabancı University, which ranks first in terms of per-student expenditure with YTL 30,000. Two-thirds of expenditures at Sabancı University is provided by student income.
Expenditures per student by five Turkish foundation universities -- Sabancı University, TOBB ETU, İzmir Economy University, Koç University and Fatih University -- are higher than the amount they earn from students. These universities spend around YTL 20,000 student. Universities such as Beykent, Yaşar and Çağ, on the other hand, have an annual tuition of YTL 10,000 but spend at most YTL 4,000 per student.
Beykent University ranks the lowest, with an annual per-student expenditure of YTL 2,600.
“The criteria of the Higher Education Board (YÖK) for measuring investment in students are not sufficient,” said Cuma Bayat, the rector of Beykent University. “Our investments are much higher than their data. Beykent University invests in facilities too, while YÖK only takes into account current expenditures.”
More than 30 foundation universities
The first foundation university in Turkey, Bilkent, was founded in 1984. Today, the total number of foundation universities in Turkey is 32. The university's biggest source of income is students' tuition. Taking into account the foundations' contributions, these private universities manage a total annual budget of YTL 1.5 billion.
However, they are being criticized for not sharing enough of the resources with their students. The amount most of these foundation universities spend per student is less than half of the amount the student pays, despite being founded on not-for-profit principles.
How these foundation universities spend their income is the biggest question those criticizing the universities are asking. Another question mark is whether the financing of these universities is provided based on their founders' contributions or the income gained from students.
Harvard funding model
In Turkey, university endowment funds are nearly non-existent. Therefore, foundation universities are mostly dependent on fees and tuition from each student. The Sabancı University endowment fund, for instance, is the largest with $500 million, despite the fact that the university is one of the country's financially strongest higher education institutions.
Meanwhile, prominent universities are financially dependent on endowment funds. The “super endowments” of Harvard and Yale are two examples. The Harvard endowment fund is the largest in the United States, standing at $29.2 billion, and the Yale endowment fund comes second, with $18 billion. Private universities in the United States in general are only partly dependent on revenues from students.
The Turkish reality
Rectors and trustees at Turkish foundation universities are split in their opinions about financial resources and expenditures per student.
“If the amount a foundation university invests per student is equal to the amount it receives from a student, this means that university does not seek profit and is focused on success,” said Kesici.
But Bayat said the foundations alone cannot meet the costs for infrastructure and 20 percent of expenditures.
“Although foundation universities are not nonprofit institutions, they still have to act in accordance to keep revenues and expenditures in balance,” Bayat said.
Mustafa Aydın, the head of the trustee's board for Istanbul Aydın University, said the responsibility of the foundation ends after establishing the university. As foundation universities should create all their own revenues, they should structure finances with the profit-oriented mentality of a company, Aydın said.
Low tuition policy
Ali Rıza Büyükuslu, the rector of European University of Lefke, said what is missing in Turkey is private universities.
What exists in Turkey is foundation universities, he said. Foundation universities should have tuition that allows them to break even, according to Büyükuslu. “Foundation universities should not aim to profit. Private universities can have YTL 50,000 per year if they want,” he said.
Poorly directed financial policies can lead to a private university going bankrupt. Some private universities set tuition fees at levels lower than their costs, which might result in financial crisis. One example is the Eastern Mediterranean University, or EMU, in northern Cyprus. It has been in a financial bottleneck for the last four years and announced last year that it lost about $35 million. The biggest mistake private universities make is keeping the tuitions and fees at a level lower than the costs and employing acclaimed professors at astronomical amounts in order to attract more students.
Criticisms raised against Turkish foundation universities
- They fail to carry out the mission of functioning as nonprofit entities.
- Huge gaps exist between foundation universities in terms of their expenditures per student.
- Students pay a certain amount toward costs and expenditures but the university does not spend enough on its students.
- Financial expenses are met by revenue gained from students not by the university foundation.
- Fees and other charges for graduate studies at some foundation universities are higher than those of their equivalent universities in the United States.
Meanwhile, Abbas Güçlü, a columnist at daily Milliyet who is interested in education issues, criticized foundation universities in two columns this week. In his column yesterday, Güçlü criticized their announcement of new Ph.D. programs even before the approval of YÖK. Foundation universities should be opened in Anatolia rather than in Istanbul, Güçlü stated as well.