Financing Higher Education: Sources and Uses of Funds of Private Colleges in Kerala

ONE OF THE unique features of Kerala?s educational infrastructure lies in the predominance of the private sector. While there has been much criticism of the way the private colleges function, no study on their financing exists. The present work attempts to fill the lacuna.
Among the Institutional sources of finance, state government grants constitute over 90 per cent. A major share of the total grant, however, is earmarked for payment of salaries of the teachers who are highly organised, and grants allotted for the provision of such basic facilities as libraries and laboratories which directly contribute to the academic performance of colleges, are ridiculously meager. It is argued that, with the mounting resource crunch confronting the state government, one way to strengthen the finances of colleges in the private sector is to restructure tuition fees so as to make those, who can afford, pay a reasonable price for the service while safeguarding the interest of the weaker sections through a liberal scheme of scholarship. Another suggestion would be to abandon the ?Direct Payment Agreement? in stages and degree and thus to confer increasing autonomy on the private colleges.
Of the non-institutional sources of finance, donations are by far the most important. Several colleges try to overcome the inadequacy of government grants by resorting to compulsory donations. The study has brought out the fact that the practice of accepting or not accepting donations as a precondition for appointment of teachers and /or admission of students does not by itself lower of raise the quality of higher education. Interestingly, fairly high levels of performance are shown both by colleges which do and which do not accept compulsory donations. The available evidence, nevertheless, goes overwhelmingly against colleges having recourse to donations.