Financial Background

Financial Background of Higher Education Institutions
The main financial sources for the public educational system come from the budget. According to the legislation the Government should allot annually 7% of the GNP to education and provide protection to the budgetary allowances. Public education can also benefit from other legal financial sources such as tuition fees for studies and continuing education courses, contracted research, from rental of their spaces, buildings and equipment, donations and revenues from international cooperation and from physical and juridical persons.
Budgetary financing covers only salaries, stipends and constructions. Students enrolled in conformity with the plan approved by the Government receive stipends. But their number decreases year by year, as budget allocations are becoming less. There are 3 types of stipends for these students: national, governmental and social stipends. These are paid only to local citizens. The amount of funds for research activity from the budget is very small. Other sources of research financing are direct contracts with enterprises, international projects, etc.
In the period of reforms the Republic of Moldova faces a lot of problems in financing education. Public investments in education are very small. To mention that public allowances cover only 40% of needs. The number of students paying tuition fees increases year by year. For example, in the academic year 1998/1999 33% of students in Colleges and 50% of students in universities paid tuition fees.
Low wages do not allow younger staff to work in universities and colleges. They leave their jobs looking for higher salaries. The average age of academic staff is growing.
In the rapidly changing conditions in Moldova the education encounters almost alone the economic decline, the multiple problems that demand urgent solution. The State is not able to improve financing of education and in this situation the intrusion of the private sector in educational services, in particular, in higher long and short term education, is quite timely.