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Advances in Social Sciences Research Journal – Vol. 9, No. 9
Publication Date: September 25, 2022
DOI:10.14738/assrj.99.13071. Chowdhury, M., & Islam, A. (2022). Increasing Cost and Decreasing Affordability of Higher Education in Bangladesh. Advances in
Social Sciences Research Journal, 9(9). 430-434.
Services for Science and Education – United Kingdom
Increasing Cost and Decreasing Affordability of Higher Education
in Bangladesh
Mushfek-ul-alam Chowdhury
Bangladesh University of Professionals (BUP), Dhaka, Bangladesh
Aynul Islam
Department of Economics, Jagannath University, Dhaka
INTRODUCTION
Education is a basic human need. One must have an equitable privilege to receive education. It
is an inherited human right as delegates of a modern society. When the term education is used,
it can’t be limited by categorizing the level or the ladder that one could climb in normative
sense. Morally, there should not be any restrictions upon one’s inclination to accumulate
knowledge. In economic sense, one must have enough education to earn his maximum
livelihood from a given society in which he/she lives in. This refers to a minimum level of higher
education that promises to deliver a maximum return in any form of labor market (formal or
informal). But considering the present context of Bangladesh the resulted outcome of higher
education seems exactly the opposite. Cost of higher education is exceeding the minimum
return it should generate. Some of the critics proclaim this is a largely accepted scenario for
private universities when that is not truly the entire case. The spending on higher education is
increasing in both public and private sector simultaneously and gradually, the affordability of
a quality degree is getting beyond the reach of the middle income group. Many authors
primarily blame the increasing tuition fees in private universities as a painful financial burden
for average income families. The truth is: this is not the only burden which the educated youth
in Bangladesh bear. The sharp edge of increasing unemployment is outpunching the low
squandering, highly prestigious yet a poorly mismatched quality of higher education which
public institutes presently deliver. The current paper not only aims to expose the increasing
cost of higher education in but it also targets to express the different types cost mechanisms
which are incurring in both public and private sector. The author gathers secondary data from
different sources to prove this above statement.
BACKGROUND
Helal (2012) believes that higher education is needed for the establishment of fundamental
human value and freedom. Sarkar (2016) believes higher education is the essential tool for
social and technical development. Both these statements clearly indicate that the surplus value
of human capital and overall economic progress of a whole society is largely depended on
higher education. But the current cost of higher education is setting both of these components
into severe deadweight loss. This cost can be expressed in terms of implicit and explicit.
Explicit cost assumes the eminently rising spending in the private universities that one has to
go through directly including the tuition fees and other relevant expenditure.
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Chowdhury, M., & Islam, A. (2022). Increasing Cost and Decreasing Affordability of Higher Education in Bangladesh. Advances in Social Sciences
Research Journal, 9(9). 430-434.
URL: http://dx.doi.org/10.14738/assrj.99.13071
(a) (b) (c)
This cost is incurring because of the minimum price floor private universities are setting to
deliver higher education as a service; it is extracting a huge portion of consumer welfare
because of the number of merits who are deprived of purchasing such service. Ultimately it is
only the upper income group who is being served from the private higher education. As a result,
the equilibrium a society needs to achieve in terms of supply and demand of quality graduates
is far distanced from the present scenario (in figure c). One has to consider the top categories
among the private universities if this above statement is to be taken seriously. There are many
private universities in the country - which is true. But not all of them can afford to supply quality
graduates. In order to fulfill the supply of the collective labor market they can’t afford to deliver
such quality within a price range that can reach a free market equilibrium (in figure a).
Evidences from Helal (2012), Ahmed, Iqbal and Abbasi (2018) and Nakata and Sharma (2019)
clearly support the above claim. Findings from these studies either show that private
universities are charging relatively a higher tuition fees or students from rich family
backgrounds are over represent the private sector. The question one must ask – what went
wrong with the public institutions? A ‘social but indirect cost’ is incurring through gaining
higher degrees at public institutions which is implicit. This involves financial burden that is
resulted from session jams, unproductive employment to generate negative labor market value,
horizontal or vertical cost due to mismatch between expected skills or area of study and actual
job roles and job fields which are available in the market. As a result, the market is flourished
by public graduates but because of the price ceiling, the quality they (public education
producers) need to deliver is vigorously constrained and harrowingly compromised (in figure
b). Ultimately, shortage of quality graduates is leaving the entire labor market with low wage,
mismatched job traps.
SECONDARY EVIDENCES
Ashraf, Joarder, Masum and Ibrahim (n.d.) found the need to focus on cost of education in
private universities affecting the quality and this factor was statistically highly significant. It
explained 3.854% of the variance in quality of the higher education (listed as third after faculty
credentials, classroom, academic calendar and other facilities in principle component analysis).
Haque (2009) cited via Helal (2012) claim that a higher marginal cost is occurring to deliver
higher education at private universities each year due to a higher rental cost of the institutional
infrastructures which are located in more expensive areas of the city that leads to a spending
of 11 times higher than public institutes which students indirectly bear through paying their
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Advances in Social Sciences Research Journal (ASSRJ) Vol. 9, Issue 9, September-2022
Services for Science and Education – United Kingdom
tuition fees. Jawad a private university student makes the following statement – tuition fees in
private universities range from 40,000 taka to 80,000 taka on an average and it may
substantially increase, depending on how many credits one must enroll for in one semester
(www.thedailystar.net). World Bank (2019) claims private education costs households 1.26
times more at the tertiary level than the higher secondary level which is relatively an expensive
investment for an average income family. Ibid (n.d.) further indicates the currently available
part-time jobs, scholarship programs and loan/grant facilities are clearly scarce in number,
hence these programs are not enough to supply education to enormous number of talents who
are academically more credible. Considering weighted average scores on relatively higher
tuition fees in private universities was agreed by a majority in the sample that was studied by
Ibid (n.d.) There is also evidence for lack of financial aid for poor students as well as expensive
study materials (Ibid, n.d.). Finally, Jamil, Abdullah and Sarker (2012) found in their studies that
cost of study (material, physical and other psychological costs such as stress, tuition fees, part- time job facilities etc.) seem to be the most significant factors for most of the students in getting
selective while they choose private higher education. According to UGC report (n.d.) cited via
Billah (2019) student expenditure on an average was 81 thousand 182 taka per semester for
those who were studying in private institutes. Further, evidences from Ibid (219) suggests cost
per student in one semester are as follows: at North South University 92 thouasand 744 taka,
at Independent University 2 lakh 13 thousand 450 taka, at Ahsanullah Science and
Technological University 83 thousand 34 taka, at East West University 87 thousand 283 taka,
at BRAC University 1 lakh 49 thousand 23 taka, at Stamford University 1 lakh 9 thousand 575
taka. All these amounts are almost forty times higher than the average that is spent by a Dhaka
University student and almost one thousand times higher than a Jahangirnagar university
student in one semester including hall fee, tuition and other expenses (www.daily-sun.com).
Thus the researcher may arrive to this conclusion that considering the number of graduates
who can avail themselves (financially) a top quality private education and the number of quality
graduates which are demanded in the labor market or amount of individual private or
aggregate social return that is expected - the cost effectiveness (cost per additional unit of
benefit) is entirely lost and a dead weight loss is occurring due to supply constraints of quality
graduates.
Mystery of rising cost of higher education in public universities can be unfolded when one
considers the cost efficiencies. Student’s contribution to total revenue structure seems only 5%
of the total structuring cost according to UGC 2006 report (UGC, 2006a cited via Mamun, 2011).
Findings from Ibid (2011) clearly suggest public university education system is not scale
efficient considering the output level it delivers. Additionally, the cost of processing human
capital, social cost in terms of tax repayment that is expected from educated labor class,
negative return in the labor market on schooling cost and increasing opportunity cost for the
time in the labor market that is sacrificed in the classroom, absence of relevant skills and other
demand-supply mismatch qualities, added session jams, political disturbances impose an
indirect, implicit but heavier financial outlays on government who directly finances the public
education. Karim (2015) found in his studies that the poor people could benefit more the
primary and secondary education but significantly less from tertiary education in public sector.
In fact, it is the rich group who received more benefits from both private and public higher
education because of access, income disparity and poor employment conditions. Evidence from
Sarker and Hossain (2016) on public university graduates indicate – these people (who are
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Chowdhury, M., & Islam, A. (2022). Increasing Cost and Decreasing Affordability of Higher Education in Bangladesh. Advances in Social Sciences
Research Journal, 9(9). 430-434.
URL: http://dx.doi.org/10.14738/assrj.99.13071
general education categories) remain unemployed for an average of 10.09 months following
the completition of their graduation, it is 9.42 months for agricultural graduates, 7.29 months
for engineering graduates, and 9.40 months for science and technological graduates. Further
Ibid (2016) estimates added cost of session jams as follows: 2.30 lakh for engineering
graduates, 2.1 lakh for agricultural graduates, 2.09 lakh for general graduates and 1.79 lakh for
science graduates. The evidences on implicit cost which incurs in public higher education
system can be further shown through the following aspects: most of the graduates are occupied
either in non-technical jobs – specially from agricultural universities but their relative
expenditure compared to general, engineering or science institutions are 3.5 times higher.
Hence, the researcher has a strong reason to believe that there is an overall gap between the
education system and employment pattern that is resulting in unproductive expenses and
loosing economic efficiencies.
CONCLUSION
It is true that when an economy is creating massive number of graduates but not generating
surplus employment higher education is disadvantageous (Erdem and Tugcu, 2012). It is also
undeniable that lack of cost effectiveness due to higher price and less capacity or shortage of
cost efficiencies because of insufficient return on the scale of economy are vital factors. When
production cost of higher education will exceed buyer’s capacity there will be a negative return
in the society because of a poor quantity and cynical welfare. But when the production cost is
cheaper and the quality is compromised, the society rather experiences another form of
economic fatality because of the inefficient value it generates. In either way, cost of higher
education is increasing both explicitly and implicitly. The researcher recommends the
following:
• Reduction of tuition fees, access to financial aids, part-time job facilities for rural and
middle class economies in private education system.
• Revision of teaching and administrative salary and quality upgrades in terms of tools,
equipment and infrastructure in public education system.
• Creation of equal access to higher education for both rural and urban inhabitants.
• Creation of a proper matching system between higher education and employment
pattern in the labor market in terms of skill generation, academic disciplines and
technical scopes.
• Avoidance of negative externalities such as political turbulence, session jams and
mismanagement of government funds and poor governance.
• Overall reduction of drop out rate in higher education from poor and middle income
families by introducing education subsidies, national student loans, and credit facilities
for financially disadvantaged households with eligible students.
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Services for Science and Education – United Kingdom
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