ESTIMATING THE COST OF TERTIARY EDUCATION IN JAMAICA...

B171FEBRUARY 2017

ESTIMATING THE COST OF TERTIARY EDUCATION IN JAMAICA

ESTIMATING THE COST OF TERTIARY

EDUCATION IN JAMAICA

On behalf of:

The Jamaica Tertiary Education Commission (J-TEC) and The Ministry of Education (MOE)

Lead Researcher: Damien King

Research Support: Simon Johnson and Caribbean Policy Research Institute

February 9, 2017

ARP Average number of rooms per person

CaPRI CaribbeanPolicyandResearchInstitute

EMC EdnaManleyCollegeoftheVisualandPerformingArts

J-TEC JamaicaTertiaryEducationCommission

OCSL OpportunityCostofStudentLiving

MOE MinistryofEducation

STATIN StatisticalInstituteofJamaica

UTECH UniversityofTechnology

UWI UniversityoftheWestIndies,Mona

ABBREVIATIONS

ProgrammeFactSheet

Project Title DeterminingtheEconomicCosttopursueanundergraduatedegreeatUWI,UTECHandEdnaManleyCollegeofPerformingArts

Sector Education

Sub-Sector TertiaryEducation,Undergraduate

Duration 4Months

Starting Date July14,2016

Intended Beneficiaries MinistryofEducation

JamaicaTertiaryEducationCommission(J-TEC)

Research Goal To contribute to policy formulation and implementation thatwill enhance access to thequalityoftertiaryeducation.

Research Objective To determine the economic costs associatedwith pursuing an undergraduate degree atJamaicanpublicUniversities

Components Investigationofinstitutionalcostsaffiliatedwithundergraduatedegreeprogrammes

Surveytodetermineeducation-relatedstudentexpenses

CollationandAnalysisofdatafromresearchsources

Key Stakeholders UndergraduateStudents

UniversityAdministrators

MinistryofEducation

J-TEC

CONTENTS

Abbreviations 2

ProgrammeFactSheet 2

TableofContents 3

Introduction 5

Methodology 6

ResultsandAnalysis 7

CatalogueCost 8

TranscriptCosts 10

SocialCost 15

FinancingOptions 18

StudentFinancingOptions 19

References 21

Glossary 21

Appendices 22

INTRODUCTIONAscertaining the true cost of providing an undergraduate degree in Jamaica is critical for students, tertiary institutions, andgovernmentpolicy-makers.Forprospectiveandcurrentuniversitystudents,understandingtherealcostofadegreemayforcethemtomakemorecost-effectivechoices,thus,reducingthecostbarriertoeducationandincreasingthelikelihoodoffinishingtheirdegreeprogramme.Forpolicy-makers, this information is important inorder tomakedecisions thatultimatelyenhanceaccesstoandchoiceofattainingatertiaryeducation.Lastly,tertiaryinstitutions,andbyextensionthegovernment,wouldbeinterested indecreasing thisbarrier (the real cost) to tertiaryeducationwhich in turnwould increaseaccess,enrolment, andcontributemoresignificantlytoeconomicdevelopment.

Education is arguably the most important factor in attaining economic development. No country can achieve sustainabledevelopmentwithoutasubstantialinvestmentinhumancapital1. Therearebothpublicandprivatebenefitstoincreasingtheamountofpeople in a citizenrywhohaveattainedhigh levelsof education.Thepublicbenefits includeanexpansion in theknowledgebaseofaneconomy,whichdrivesproductivityandtechnologicalinnovation.Itcanbesaidthatasmartereconomyisamoreproductiveeconomy.Individualswhoattainahigherlevelofeducationbenefitfrombetteremploymentprospects(bothlocallyandabroad),highersalaries,agreaterabilitytosaveandinvest,andabetteropportunityatsocialmobility2.

ThisstudyaimstodeterminetheextentofthecostbarriertoaccessingandattainingatertiaryeducationinJamaicabylookingatthreeinstitutions:theUniversityoftheWestIndiesMonacampus(UWI),theUniversityofTechnology(UTech)andtheEdnaManleyCollegeoftheVisualandPerformingArts(EMC).Theseinstitutionswerechosenbecausetheycumulativelyaccountfor11.3percentagepointsofthe28.9percenttertiarycohort(personsaged20-24)whoareenrolledintertiaryinstitutions3,andabsorbahighper-studentsubsidyfromthegovernmentannually.TertiaryenrolmentinJamaicadecreasedby3.9percentbetween2010and2014.Suchareductionintheaccesstotertiaryeducationstrengthenstheargumentforpolicy-makerstoidentifythepotentialcoststoeducationaswellasformulatepoliciesaimedatbroadeningfinancialalternativesandimprovingaccesstoandchoiceoftertiaryeducation.

AlthoughthisstudypullsfromthemethodologyoftheDeltaCostProjectWhitePaper4,wehaverestructuredthemeasurementforthecostsofadegreetoadapttoJamaica’seducationalsystem.ThethreemaintypesofcostareidentifiedasCatalogueCost,TranscriptCost,andSocialCost.Thefirsttwocostsaredeterminedusingdatacollectedfrominstitutionsandtheirstudents.Thesecostsaredeemedaccountingcosts5.Thethirdcost,thesocialcost,takesintoconsiderationthepreviousaccountingcostsbutadjustsforproductionforegone.

The first section outlines the methodology used to collect the data needed for the study, data descriptions, and the mainassumptionsmadeinthepaper.Thesecondsectionprovidesadescriptionofeachcostused,adiscussionofthesecosts,theresultsofouranalysisandinferencesaboutwhatthedatarevealed.Thethirdsectionhighlightsthecurrentmechanismsthroughwhichstudentscanfinancetheirtertiaryeducation.Finally,thefourthsectionconcludesbyofferingrecommendationsforreducingthebarriertoeducationfacedbystudents.

1 Ozturk (2001)2 Bloom, Canning, Chan (2006)3 The Economic and Social Survey of Jamaica (2014)4 Johnson (2009)5 The accounting cost is a total explicit monetary value

4 | ESTIMATING THE COST OF TERTIARY EDUCATION IN JAMAICA

METHODOLOGYStudentsweresurveyedtoprovidedataonthecostsassociatedwiththeirundergraduatedegree,alongwithdemographicandsocio-economic information.Thesurvey instrumentutilizedwasaquestionnaire6. In theabsenceofapopulationsample, theresearchteamsetatargetsamplesizeof50respondentsper institution.Thetargetpopulation isallstudentsenrolled inthestudyprogrammeschosenateachinstitution7.AccordingtotheCentralLimitTheorem8,generallyinasimplecaseofestimatingapopulationmean, if thesamplesize isat least30, then it is fair toassumethatthesamplemean isapproximatelynormallydistributed.Thus,anysamplesizegreaterthan30wouldbeconsideredtobeapproximatelyrepresentativeofthepopulation.

Thetotalsampleultimatelycomprised232respondentsbutwassubsequentlyreducedto213duetotheomissionofoutliers.Ofthis213respondents,atotalof100werefromtheUniversityoftheWestIndies,73werefromtheUniversityofTechnologyand40fromEdnaManleyCollege.102respondentswerebetweentheagesof17and20;104werebetween21and24;5personswereaged25through28whileonly2personswithinthesamplewereolderthan28yearsold.Thesampleconsistedof202fulltimestudentsand11part-timestudentsofwhich,56wereatlevel1;57wereatlevel2;72wereatlevel3,and27respondentswereintheirfourthyearofstudy.

Thesampleaccounted fora rangeofdegreeprogrammes.Themost representedmajorwasVisualArtswith37 respondentsfollowedbyManagementorBusinessStudies,andHotelandTourismManagementorTourismManagement,whichaccountedfor28respondentseach.ThemajorityofHotelandTourismstudentswere fromUTech. Twenty-onepersons indicatedtheirmajortobeBankingorBankingandFinance.ComputingandDramaaccountedfor31and11respondentsrespectively.Only27respondentswereEngineeringstudents,while18wereActuarialand12IndustrialTechnologystudents.

Datarequiredtocalculatethedirectandindirectinstitutionalcostswereextractedfromthemostrecentfinancialstatementsoftheinstitutions.FortheUniversityoftheWestIndies,theresearchteamusedthefinancialstatementsfortheyearendingJuly31st2016.FortheUniversityoftheTechnology,thecostswereextractedfromtheirfinancialstatementsfor2014/15,thusarenotconsistentwiththesurveydatacollectedin2016.Tocorrecttheproblem,thevaluesinthefinancialstatementswereinflatedbyaveragepricesincreasesbetweenthetwotimeperiodsusingdatafromtheConsumerPriceIndex.ThefinancialstatementsexaminedforEdnaManleyCollegewerefortheperiod2015/16,andsodidnotpresentaproblem.

Forthepurposeofthisstudy,aschoolyearistakentobean8month,32weekor2-semesterperiod.Asaresult,monthly,weeklyandsemesterexpensesaremultipliedbytheirrespectivefrequenciestoattaintheannualexpenses.AllexpensesinthisreportarepresentedinJamaicandollarsunlessotherwisestated9.

6 See Appendix17 See Appendix 28 See Hill, Griffiths, Lim (2011)9 The two sources represent money of different real values due price inflation between the two time periods.

ESTIMATING THE COST OF TERTIARY EDUCATION IN JAMAICA | 5

RESULTS AND ANALYSIS Theobjectiveistoestimatethecostofanundergraduatedegreefromtheperspectiveofthestudents,theinstitutionatwhichtheyareenrolled,andthesocietyasawhole.Thefigurebelowoutlinesthemodelusedtoestimatethecostofanundergraduatedegreeandthesubsequentparagraphswillprovidefurtherclarificationonthesecostandtheirimplications.

Figure 1: Schematic of Costs to Students and Society

*All the instituion’s recurrent costs. per student, not covered by the student payments to institution.

InFigure1,thecostoftertiaryeducationtostudentsisrepresentedinblue,andthecosttothesocietyrepresentedingreen.Inthebluesectionoffigure1,wehaveoutlinedthecategoriesusedtoarriveatthetotalcosttostudents.First,thestudentfacestuitionfeesandmiscellaneouscosts,whichisthecostdescribedinthecataloguesofuniversities. Thecataloguecost isthenmultipliedbytheaveragetimethatittakestocompleteadegree(completiontimemultiple)whichisthedirectstudentpaymenttotertiaryinstitution.Thecostforbooksandsupplies,living,andtheforegoneincomethestudentwouldhavereceivediftheywereworkingisthenadded.Thisthengivesyouthetotalcostthatthestudentpayswhichistheeffectivestudentcost.Theeffectivestudentcostisthenaddedtotheinstitutionsubsidypaidbygovernment,whichgivesyouthetotalcostofthedegree.Thegreensectionrepresentsthecostbornebythesociety.Thesocietybearsthreecosts,—effectivestudentcost,themoniespaidthroughthegovernmentsubsidytotertiaryinstitutions(institutionsubsidy)andtheproductionlossesbecausethestudentisnotworking.Theentirestudentcostandthesocietycostareaddedtogethertoprovideanestimateofthefullcostoftertiaryeducation.Allthesecostsarediscussedandexaminedfurtherinthefollowingparagraphs.


Catalogue CostThe Catalogue Cost represents the minimum cost of attaining an undergraduate degree as outlinedwithin the institution’s catalogueandiscalculatedbysummingeachyear’stuitionandmiscellaneousfeesovertheinstitutionalrequiredtimetocompleteadegreeprogramme:3 years for UWI, 4 years for UTech, and 4 years for EMC (4 years)1. This may be viewed as the cost advertised in the tertiary institutions catalogue.

Catalogue Cost = Cost of attaining a degree for the 3 or 4 years

Table 1: Catalogue Costs per degree programme at each institution

*The average 3-year versus 4 –year programme. The average catalogue cost of anElectronic Engineering degree is excluded since it is an outlier. The 3 years

1 The Catalogue cost assumes that all students enter their degree programmes in the first year and don’t transfer in or out of their chosen programme of study.


Figure 2: Catalogue Costs for a Degree (average)

Figure2,basedonthedatainTable1,showsthatthetuitionplusmiscellaneousfeestoattendUTecharehigherthantheyareforUWIforcorrespondingdegreeprogrammes.Thisarisesfortworeasons.First,UTechprogrammes,whichgenerallydonotrequireCAPEformatriculation,needfouryearsatnormalcourseloadstocompletewhereasUWIprogrammes,whichdorequireCAPE,aretobecompletedinthree.Thus,UTechcataloguecostsareinflatedbytherequirementtobeinschoolforanextrayear.Inaddition,UTechtuitiononanannualbasisishigherthanthatofUWIforcorrespondingrequirementtobeinschoolforanextrayear.Inaddition,UTechtuitiononanannualbasisishigherthanthatofUWIforcorrespondingprogrammes,byanaverageof9percent.Thisaveragemasksgreatvariation,though,withActuarialScienceatUTechcostingsome38percentmoreannuallythanUWI,whileattheotherend,HotelandTourismManagementcost8percentmore.(ComparisonswithEdnaManleyCollegearenotfruitfulsincetheydon’thaveprogrammesthatcorrespondtothoseattheothertwoinstitutions.)

MiscellaneousfeesatUTechareatleasttwiceasmuchasUWIandEMC.ThisdivergencemaybeanindicationthatUTechispassingoffalargerproportionofitsoperatingexpensestoitsstudents.Whatwecall“miscellaneousfees”aresometimestuitionfeesunderadifferentname.Tothatextent,themiscellaneousfeesdivergenceisnotsignificantoutsideofthelargercontextoftotalfeescharged.


TRANSCRIPT COSTS TranscriptCostsattempttocapturehowactualstudentbehaviouraffectshowmuchtuitionandfeesstudentsenduppaying.Ittakesintoconsiderationthata largenumberofstudentsdonotcompletetheirdegreeprogrammewithintheinstitutionallyrecommendedcompletiontime.TranscriptCostswilldepartfromtheCatalogueCostbyadjustingfortheactualtimetakentocompleteadegreeprogrammeandvariationsbetweenminorsandmajorsindegreeprogrammeratherthanusingtheinstitutionallyrequiredcompletiontime.

Student Payments (Adjusted Catalogue Cost)ToadjusttheCatalogueCosttoreflectactualstudentbehaviour,weintroduceda‘completiontimemultiple’1.Thecompletiontimemultipleisasanestimateoftheaveragetimetakentocompleteaparticulardegreeprogramme.FordegreesdoneatUWI,itwascalculatedfromtranscriptdataonthegraduatingcohortof2016.Wherethereweremultiplevariationsbetweenminorsandmajorsinadegreeprogramme,anaverageofallcompletiontimeswereused.ThecompletiontimemultiplesforEMCandUTechwereimputedfromthoseofUWI,astheresearcherswereunabletogettherequireddatafromthoseinstitutions.Assuch,actualcompletiontimemultiplesmaybehigherorlowerthanreported.Thisvariationinmultipleswouldbeattributableto,butnotlimitedto,variationsinexamstructureandmodalities,andthelevelofeducationandpreparationofincomingstudentstothedifferentinstitutions.

Student Payment=Catalog Cost*completion time multiple

Table 2: The Adjusted Catalogue Cost

* The averages for Student Payments are computed by taking the average for each institution’s programmes in the Student Payments column (except for Electronic Engineering which for UWI is full-cost recovery programme and thus treated as an outlier), and not by applying the Completion Time Multiple to the averages from the

Catalogue Cost column.

1 See Appendix 3 for the estimated completion time multiple used for each degree programme


Table2indicatesthatstudentspayanaverageof12percentmoretocompletetheirdegreeprogrammesthantheamountfeaturedin the tertiary institutioncataloguesand thereforemore than theywouldhavebudgeted topay.Thiswill naturally lead toamiscalculationonthepartofthestudents,andforafewwhoarebarelyabletofinancetheireducation,couldbethedifferencebetweenbeingabletocompleteanddroppingout.

Student Degree CostAttaining a degree results in a student incurring expenditure beyond that outlinedwithin an institution’s catalogueof costs.Consequently,theresearchteamsoughttoincludetheseadditionalcosts,whicharedirectlyrelatedtothestudentcompletingthedegree.Hence,books&supplies,tutoringfeesandotherdegreerelatedcoststhatarenotcoveredinthecataloguecostswereaddedtothestudentpaymentsoradjustedcataloguecost.

Student Degree Cost = Adjusted Catalog Cost+books & supplies + tutoring fees + other degree related activities

Table 3: Student Degree cost

Table3indicatesthataccountingforthecostofbooks,suppliesandtutoringassociatedwithpursuingadegreeaddsanother5to6percenttothecostofthedegreeforUWIandUTech,andasmuchas14percentforEMCstudents.ThiswidedisparityisaccountedforbythenatureoftheprogrammesofferedatEMCandthenatureofthesuppliesandequipmentrequiredforthosepursuits.Thenatureoftheprogrammesdoesnot,however,accountfortheequallywidedisparitybetweenUWIandUTech.Forbooks,supplies, andextraactivities,studentsatUTechpayonaverage50percentmoreoncorrespondingprogrammesthanthoseatUWI.Thiscuriousoutcomebegsforanexplanation.

Student SpendingStudentSpendingcostincorporates,inadditiontothestudentdegreecost,whatwerefertoasthe‘costofstudentliving’.Thiscostof livingcapturestransportation,groceries/lunch,accommodation,utilities,clothes,toiletries,entertainmentandinternetexpenses.Totalstudentspendingismeanttoberepresentativeofthetotalexpensesthatstudentsincurwhileattainingadegreebycapturinganumberofcosts.Theseinclude:thecostspaiddirectlytotheuniversity(adjustedcataloguecosts),thosewhicharenotnecessarilychargedbyorpaidtotheinstitutionbutwhicharenecessarytocompleteaprogramme(studentdegreecost)and


thosecostswhichastudentincursinlivingdaytodayduringthelifeofthedegreeprogramme(costofstudentliving).

Thesurveyrevealed livingcostsofbetween$1.4and$1.9million,dependingonthe institution.This largeamount,however,exaggeratesthecostoftertiaryeducationsinceitincludesexpendituresthatstudentswouldhaveincurredwhetherornottheywereinschool.Sothiscomponentofstudentcostsneedstoberefinedfurther,towhichwenowturn.

Student Effective CostThecostoflivingofstudentsmaynotbecompletelyrepresentativeoftheactualcostofpursuingadegreebecausesomeoftheexpenditureswhilebeingastudentwouldhavebeenincurredeveniftheywerenotpursuingadegree.Forexample,astudentthatchoosestoworkratherthanpursueanundergraduatedegreestillincurstransportationcostsbytravellingtoandfromwork.Anotherexampleisbreakfast,amealusuallyeatenathome,whichwouldhavebeenequallynecessaryifthestudentwerelivingathomewiththeirfamilyratherthanbeingawayfromhomeattheuniversity.

TheStudentEffectiveCostthusseekstoadjustthestudentspendingcostabovebyexcludingexpenditurethatwouldhavebeenincurredinanycaseandkeepinganylivingcostthatwouldhavebeenincurredbyvirtueofbeingastudent.Henceforth,wewillbereferringtothisadditionalmeasureastheopportunitycostofstudentliving(OCSL).

Thiscostismeanttorepresentthetotalamountthatthestudentactuallyincursinpursuinganundergraduatedegreebyaccountingforexpensesthattheycouldhaveavoidedhadtheynotbeeninschoolforthedurationoftheprogramme.

Student Effective Cost=Total Student Spending+the oppurtunity cost of student living (OCSL 1)

Table 4: Student Effective Cost

Withtheaboveadjustmentfortheopportunitycostofliving,Table4revealsthatthoseexpensesareonaverage46percentontopofthecataloguecost.Whilethefigureismuchlowerthanthatattributedtocostoflivingfromthecrudeaddingupofspendingattemptedprior,halfagain isstillasignificantfigure. Itseems likely thatmanyprospectivestudentsmightunderestimatethemagnitudeofthiscost.

1 OCSL= Accommodation/Hall Fee + Internet Expense +Utility expenses incurred solely because of enrollment in school + Transportation cost (However, in cal-culating the opportunity cost of transportation, we adjusted the cost to account for only the proportion of students that would not have incurred transportation costs that is, those students who would have been unemployed hence would have had not need to incur a transportation cost. Therefore, Opportunity cost of transportation = Total transportation expense*youth unemployment rate of 27.4 percent)


SOCIAL COSTSo farwehave includedonly thecostsofdelivering theeducation that are recoveredby the institution through tuitionandmiscellaneousfees.Wealsohavetoconsiderthosecoststhataren’trecoveredfromstudentsandarebornebytheinstitutionandultimately,thewidersociety.

Institutional CostsDirect institutionalexpenditure1, toprovide for theeducational servicedelivered to tertiarystudents, includesadministrativeexpenses, cleaning and sanitation, computer and software licenses, general office supplies, laboratory andmedical supplies,printingandstationary,repairsandmaintenance,equipmentandspacerental,security,teachingandresearch,staffcosts,traininganddevelopment,andutilities.Thesumofthoseexpendituresandnumberofstudentsenrolled,by institution,yieldeddirectexpenditureontertiaryeducationperstuden2t.Theresultantamountisthecostofeducationthateachstudentshouldbepaying,onaverage,inordertocoverthecostsoftheservicebeingofferedtohim/her.However,theinstitutionsrecoveraportionofthiscostfromstudentsthroughtuitionandmiscellaneousfees.Thus,thetotaleducationcost(institutioncostperstudent)minusthestudentdegreecostgivesustheamountthatstudentsarecurrentlynotpayingforthemselvesandtherebyrepresentstheamountofsubsidybeingprovidedbytheinstitution.Withtheconsiderationthatthisamountisfinancedbyothermeans,largelythroughthegovernment’ssubventiontoeachinstitution,thecostisbornebythewidersociety.

Total Degree Cost=Student Degree Cost+Institution Subsidy

Table 5: Total Degree Cost

1 All direct institutional expenses were recovered from the financial statements of each institution.2 This is the total direct expenditure of the university divided by total enrollment


Table5 indicates that the institutional subsidiesbygovernmentvaryacross institutions.AnEMCstudent receivesfivetimesmorethantheamountofsubsidythataUTechstudentreceiveswhileaUWIstudentreceivesfourtimesmorethantheamountofsubsidythataUTechstudentreceivesonaverage.ThebasisforthisisthatthecostofeducatingastudentatEMCandUWIisconsiderablyhigher,byamultiple,thanatUTech.Thiscanariseforbothgoodandbadreasons.SomeofthedifferencereflectsthehighercoststhatUWIincursbecauseitisaresearchinstitution,withitsattendantfacultyandresearchcosts;somemightnotbeaccountedforinthatwayandmayreflectmodesofmanagingoverheads,whileEMC’sisattributedtoitslowenrolmentratesandthenatureofitsprogrammes.

Social CostWehaveestablishedthetotalcostscurrentlyincurredinordertoprovideeducationatthetertiarylevel.Butthesocietypaysahigherpriceforstudentstobeeducated.Wecollectivelysacrificethelossofproductivecapacityanditspotentialoutputbyhavingable-bodiedpersonsoutoftheworkforceandinschool.Sincethesepersonsstillneedtoconsume,theproductivelossisalossfortheentiresociety.

Thecommonplaceproxyforthevalueofapotentialworker’slostproductivityistheimputedvalueoftheirsalary.Whataworkerwouldhaveearnedisthevalueofhis/hercontributiontotheforegoneproduct.Recognisingthis,wemayestimatethevalueoftheproductionforegonebycalculatingthevalueofthesalariesthatwouldhavebeenearned.Whiletherewouldhavebeennoguaranteethatallofthestudentswouldhavebeenemployed,equally,thereisnotreasontobelievethattheywouldhavehadahigherunemploymentratethanthenationalaveragefortheiragecohort.

Forthispurpose,weusedtheaveragewageof“wageearnersinlargeestablishmentsbyindustry”3datafromSTATIN.Thedegreeprogrammesunder studywere then categorisedbasedon the industry4, afterwhich the associated averagewas appliedperdegree.Thefinalstepwastoaccountfortheprobabilitythatstudentswouldhaveactuallybeenemployedifnotinschool.Thenationalyouthemploymentrateof72.6percentwasusedasanestimateofthisprobability.Thus,thetotalincomethatastudentwouldhaveearnedhadtheybeengainfullyemployedwouldbethisimputedwagemultipliedbytheprobabilityofbeingemployed.

Social Cost= Student Effective Cost+Income Foregone

Table 6: Total Social Cost

**Average # of rooms per person (ARP) is the average # of bedrooms per student. This was calculated by dividing the number of bedrooms per household of each respondent by the number of individuals that permanently live in their household. The research team worked under the following

assumptions: where ARP<1 – relatively lower income household, ARP=1 –middle income household and where ARP>1 –relatively higher income household.

3 The most recent data available was for 2012 so we inflated the respective salaries from that data set to 2016 using the Consumer Price Index.4 The assumption made here was that students who chose to do a degree in a particular field, had they chosen to work instead, would have been more than likely to seek employment in that field.


Thecosttothesocietyofeducatingastudentatthetertiarylevelisconsiderablygreaterthanthecataloguecost,asrevealedinTable6andFigure3.ThesocialcostofadegreeequatestoapproximatelysixtimesthecataloguecostforUWI,morethanfourtimesforUTech,andmorethanfivetimesforEdnaManleyCollege.Thesocietyismakingaheavyinvestmentineachtertiarystudent.Thedatawehaveshowsthatthestudentsbearmostofthatcost—between58percent(EdnaManley)and92percent(UTech).

Figure 3: Components of the Total Cost of Tertiary Education

Oftheportionthatthestudentbears,tuitionandfeesaccountforaroundaquarter (27percent,onaverage),morethanhalf(52percent) is foregone income,andmostof the rest is the (opportunity) costof livingoutsideofhome.Thecorrespondingproportionsforeachoftheinstitutionsisclosetotheaverage.

Oneimplicationofthisdataisthatthestudentloanfacility,aspresentlystructured,isinadequatetocovermostoftherealcostofatertiaryeducationsincesomuchofitisnotpaidtotheschools.Afurtheroff-shootisthatthehighdropoutratesattheseinstitutions could be the result of socio-economics andnot academics.A student needing tomeet the daily cost associatedwithgettingadegreemightstruggle toallocatesufficienttimeto their schoolwork,which in turnmanifestsaspoorgrades.Thus,studentswhoareforcedtowithdrawfromschoolduetopooracademicperformancemayhaveactuallybeenaffectedbyeconomicfactors.


FINANCING OPTIONSTertiaryeducationfunding inJamaica isusuallyacombinedeffortbetweenthegovernment,students,andanumberofothercontributorswhoofferscholarshipsandotherformsofmonetaryandnon-monetaryassistance.Chiefamongtheseareprivatesectororganisations,privatedonors,andinternationalaid.Nonetheless,avastportionofstudentsstillfindtertiaryeducationunaffordable.ThissectionofthereportwillseektohighlightthevariousmethodsoftertiaryeducationfinancinginJamaica.

Government FinancingThegovernmentfundsthevastmajorityofthetuitioncostsforanumberofcoursesofstudy.Particularly,financingisprovidedthroughdirectsubsidies,whicharepaidovertotheinstitutionseach year or through loans, scholarships and social welfareprogrammes.Theseprovisionsareaimedatoffsettingthecostofattainingatertiaryeducation.

The Students’ Loan Bureau (SLB)TheStudents’LoanBureau isJamaica’spremier student loanfinancing organization, providing funding for students whohave been accepted into a recognized tertiary institution.TheSLBisabletolendbecauseofitsrevolvingloanscheme.Studentsborrowtodayandagreetorepayattheendoftheircourse of study to ensure that succeeding generations ofstudentsbenefit fromthe fund.TheSLBestimates that theyfundapproximately30percentofenrolledstudentsintertiaryinstitutionsorover14,600students,asof2014.

Programme of Advancement through Health and Education (PATH)TheProgrammeofAdvancementthroughHealthandEducation(PATH)isaconditionalcashtransfer(CCT)programmefundedbytheGovernmentofJamaicaandtheWorldBankwiththeaimofdeliveringbenefitsbywayofcashandbursarygrantsto the most needy and vulnerable in the society. In 2009,

PATH began to offer a post-secondary bursary that allowsbeneficiaries to secure a one-time payment of $50,000 topursueadegreeprogramme.However,inordertoqualifyforthePATHprogramme,applicantsmustsatisfyitsspecificeligibilitycriteria–provethattheyareamemberofalowincomeorpoorfamily residing in Jamaica. This is accomplished through theapplicationofaProxyMeansTest.Duringthistest,theapplicantis asked to provide personal data pertaining to their familyincluding levels of education attained, consumption patternsand expenditures, and access to basic social amenities. ThecomplicationthatariseswiththisassessmentisthatgenuinelypoorandneedystudentsmaynotpasstheProxyMeansTestandassuchwillnotqualifyforfunding.Additionally,forthosestudentswhodoqualify,theprogrammeonlyoffersaone-offpaymentandassuchitonlyoffsetsaminorpartofthecostofeducationforasingleyear.

Jamaica Values and Attitude Programme (JAMVAT)TheJAMVATprogrammeassiststertiarystudentswhoqualifyfor admission to an approved institution but are unable tocover their tuition cost. Access to this programme providestheopportunityforstudentstoparticipateinthedevelopmentofthenation’ssocialcapitalthroughtheircontributionof200hoursofpublicservice.Inreturn,thegovernmentundertakes30percentofthestudent’stuitioncost,notexceeding$350,000perannum.


STUDENT FINANCING OPTIONSFinancial InstitutionsAllmajorfinancialinstitutionsofferloans,whichcanbeusedtofinancetertiarystudies.However,onlyfewoftheseinstitutionshave loans dedicated to education.Themain problemswiththismethod of financing is that the interest rates can be ashigh as 15 percent. Additionally, unlike the Students’ LoanBureau,becausefinancial loansarenotgearedspecificallytoeducation,repaymentsbeginwhilethestudentisstillpursuinghis/herdegree.

Student Cultural Exchange Programme Student cultural exchange programmes are becoming anincreasinglypopularmediumforfinancing tertiaryeducation.These programmes allow students to spend the summerholidaysbeingemployed,mainlywithintheserviceindustriesof the United States and Canada. Since these programmesareofferedduring theholidays, studentsareable toearnanincomethatoffsetstheireducationalexpenseswhileenrolled.However, a major drawback of these programmes is thatthey attract a large initial expense, as studentsmust pay anexorbitant fee to secure a spot within the programme andincurothercostssuchasairfareand livingexpensesprior tobeginningtheiremploymenttenureintheforeigncountry.

Employment OptionsStudentsarebecomingincreasinglyinvolvedinbothparttimeand full time employmentwhile pursuing their studies. OneexampleisthecallcentreontheUWIcampusestablishedbySutherlandGlobalGroup.SutherlandGlobalemploysanumberofstudentsandallowsthemtoundertaketheirdegreewhileearning to pay for school and living expenses. Nonetheless,thereisstillaneedformore‘oncampus’employmentfacilitiesthatallowstudentstoundertakeworkwhileinschool.

Conclusion & RecommendationsOverall, the full cost of tertiary education is expensive forstudentsandthesociety.Inexaminingthecostconsiderations,

students will have to ensure that they are choosing theprogrammetheyenrolinandtheuniversitytheyattendwisely.For government, the distribution of the subsidies will haveto be revisited to ensure that all Jamaican students acrossthe university network equitably benefit from governmentsubsidies. Another option is to subsidise tertiary educationprogrammes in relation to the benefit to society. Meaning,degreeprogrammescouldbeassessedbasedonwhethertheyrespond to labourmarket needs, foster innovation, or servecommunities’aspirationsbeforeapproval.Thedrawbackofthisapproachisthattherecouldbeshortagesoranover-supplyofsomeskills.Also,thegovernmentcouldseektoexpandgrantsinaidofferedbyPATHandtheStudentLoanBureautocovernotonlytextbooks,butalsolivingexpenses.

Universities should review theCatalogueCostof thedegreethat is listed in their handbooks because it does not takeinto consideration all the costs that students pay directlyto the university in order to complete the degree. As such,universitiesshouldfurthercreateincome-generatingschemestosupplementthegovernmentsubsidiesandaddresstheneedforastudentsupportsystem.Loweringthecostassociatedwithpurchasing textbooks is oneway to help students burdenedbyrisingtuition.Universitiescouldexplorereducingthecostof school supplies by seeking free, open-source textbookstoeliminatea substantialandgrowingpartof the increasingcost of tertiary education: the often-prohibitive expense ofclass materials. In addition, universities could improve theaffordability of higher education by examiningwhat it coststhe industry to educate a student.More than a third of thecostofeducationatmostcolleges isattributable to thecostof instruction: how the school delivers instruction. Coursescouldberedesignedinawaythatconsidersthematerialsthatthe student uses so as to include assignments that requireslessresources.Notalloftheseoptionswillberightforeveryinstitution or for every academic department. However, ifinstitutionsandthegovernmentareseriousabout improvingoutcomesandreducingcosts,theymustbewillingtoinnovate.


REFERENCES• Economic,P.I.O.J.(2016).Economic&SocialSurveyJamaica,2015.Kingston.

• Johnson,N.(2009).WhatDoesaCollegeDegreeCost?:ComparingApproachestoMeasuringCostPerDegree.DeltaCostProject.

• Ozturk,I.(2001).Theroleofeducationineconomicdevelopment:atheoreticalperspective.

• Romano,R.M.,Losinger,R.,&Millard,T.(2011).Measuringthecostofacollegedegree:AcasestudyofaSUNYcommunitycollege.CommunityCollegeReview,0091552111416226.

• TheStudent’sBureau(SLB)2013/14AnnualReport.(2014)


GLOSSARYCatalogue Cost - Thisrepresentstheminimumcostofattaininganundergraduatedegreeand iscalculatedbysummingeachyear’s tuition and miscellaneous fees over the institutionalrequiredtimetocompleteadegreeprogramme;UWI(4years),UTECH(3years)andEMC(4years).

Completion Time Multiple -Thecompletiontimemultiple isanestimateoftheaveragetimetakentocompleteaparticulardegree program, all other things remaining constant. Thecompletion time multiples for degrees done at UWI werecalculatedfromactualtranscriptdataonthegraduatingcohortof2016.Wherethereweremultiplevariationsbetweenminorsandmajorsinadegreeprogramme,anaverageofallcompletiontimeswasused.Themultiples forUTECHandEMCdegreeswereapproximatedbasedonUWI’smultiples.

Foregone Income - This represents the income that couldhave been earned had students not chosen to enrol in anundergraduate degree programme and instead chosen topursuegainfulemployment.

Institution Subsidy - Thisrepresentstheportionofthetotalcost of a degree that students don’t pay to the institutionthrough tuition and/or miscellaneous fees. The cost is theproportionof the institutions totaldirectexpenditure that isbornesolelybysociety.

Opportunity Cost of Student Living -Thisseekstorepresentall thoseexpenses thatastudentwouldnothave incurred ifhehadnotenrolled inadegreeprogram.Here,weassumedthatastudentwhoiscurrentlypayingforaccommodationandutilitieswouldnothavehadtheseexpenseshadtheychosennottoattendcollege.

Social Costs - This represents the total cost to society andincludesboththeprivatecostincurredbyastudenttopursuetheir education but also the cost that is incurred by societythrough productivity lost (income foregone) and institution

paymentsmadeonbehalfofeachstudent(institutionsubsidy)

Student Effective Cost - Thismeasureofstudentcostsseeksto adjust the student spending cost to only reflect thosecosts that are directly related to pursuing a chosen degreeprogramme.It ismeanttorepresentthetotalexpensethatastudentactuallyincursinpursuinganundergraduatedegreebyaccountingforexpensesthattheycouldhaveavoidedhadtheynotbeeninschoolfor3or4years.

Student Degree Cost - Thiscostrepresentsthetotalinstitutionrequired fees (tuitionandmiscellaneous)alongwithallothercosts that are directly linked to pursuing a chosen degreeprogrammesuchasthecostofbooks,suppliesandanyothermandatorydegree related activityor feenot included in theinstitutions catalogue of degree costswhich is presented tostudents.

Student Payments - This cost approximate can also bedescribed as the ‘adjusted catalogue cost’. It adjusts thecatalogue cost by using the completion time multiple toestimatehowlongstudentsactuallytaketocompleteadegreeprogramme. Itgivesamoreaccurateestimationof thecoststhatstudentsincur.

Transcript Costs - Transcript costs are those that make anattemptatlookingathowactualstudentbehaviouraffectsthecostofthedegreeattributabletostudents.Thesecostsadjustthecataloguecosttoreflectstudentsthathavefailedtofinishthe degree programme within the stipulated time. Studentpayments, student degree cost, student spending and thestudenteffectivecostarealltranscriptcosts.

Total Degree Cost - This represents the total cost to theinstitution of providing an undergraduate degree. It wasestimatedbyfindinghowmuchofthetotaldirectexpenditureofaninstitutionisattributabletoeachstudent.


APPENDICESAppendix 1: QuestionnaireThankyouforagreeingtotakepartinthisimportantsurveyonbehalfoftheJamaicaTertiaryEducationCommission(J-TEC).OurobjectiveistoassessthecostoftertiaryeducationwhichwillultimatelyhelpintherestructuringofJamaica’stertiaryeducationsystemandprovidepolicyadvice to theMinisterofEducation.This survey should take less than4minutes to complete.Beassuredthatallanswersyouprovidewillbekeptinthestrictestconfidentiality.Pleasenotethatwewillnotbecollectingyournameforthissurvey,thusyouridentitywillremainanonymous.

1.Fromthelistbelow,chosetheprogrammeforwhichyouareregisteredattheUniversityoftheWestIndies, Mona.

2.Howoldareyou?

3.AreyouaFullTimeorPartTimestudent?

Full Time: Part Time:


4.Whatisthelevelofthemajorityofcoursesthatyouaretakingforthissemester?

Level: 1 2 3

5.Pleasechoosefromthelistbelowtheexpensesthatyouincurinpursuingyourdegree.

6.Areyouaresidingorcommutingstudent?

Residing: Commuting:

7.Ifresiding,whatisyourannualhallfee?

$


8.Howmanyroomsareinyourhousehold(yourpermanentresidence)?

9.Areyoutheprimaryincomeearnerinyourhousehold?

10.Howmanyindividualspermanentlyliveinyourhousehold?

11.Howmanyincomeearningindividualspermanentlyliveinyourhousehold?

THANKS FOR YOUR COOPERATION!

Appendix 2: Degree Programmes in the Study

Notes: *TheBachelorsofEducationinMathematicsforUWIwasexcludedfromthestudyduetoaninsufficient representativesample.

**TheBachelorofEducationinGeneralTechnologywasreplacedwiththenextmostpopulousdegreewithinthat area(BachelorofEducationinIndustrialTechnology.ThiswasdonebecauseaGeneraltechnologymajoris currentlynotbeingofferedatUTECH.

***TherespondentsfortheBachelorofScienceinBusinessStudiesandtheBachelorofScienceinBanking&Finance werecombinedtoformageneralBscinBusiness/ManagementStudies.ThiswasdonebecausetheBscin Banking&FinanceisoneinthesameasaBscinBusinessStudies.


Appendix 3: Completion Time Multiples

Notes: *ActualcompletionrateswerereceivedfromtheUWIforthemostrecentgraduatecohort.

*ThecompletionratesforUTECHweremodelledfromdegreesofthesamefielddoneatUWI.Thus,theperiod greaterthantheinstitutionalstandardcompletiontimeforUWIwasduplicatedandaddedtothestandard completiontimeofdegreesinthesamefieldatUTECH.Thesecompletionratesarebestestimates andassuchmayormaynotbehigherand/orlowerthanthosethatarecurrentlybeingreflected.

*IntheabsenceoftranscriptdataforEMC,thecompletionrateforbothdegreeswereestimated.Thecompletionrate forVisualArtsatUWIcouldnotbeusedinthiscaseastheentiregraduatingcohortcompletedtheirprogrammein thestandard3-yearsandassuchthiswouldnotbeatruerepresentativeofthecompletionrateatEMC.


NOTES


NOTES



ESTIMATING THE COST OF TERTIARY EDUCATION IN

JAMAICA

Toreadanyofourpublishedoutputinfull,pleasevisit www.capricaribbean.org/reports

Contactusat:[email protected]

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