Saudi Universities Take Steps Toward Financial Independence

Saudi Arabia’s new higher-education governance system, in place since last summer, grants public universities financial, administrative and academic independence in order to give them greater opportunities for development away from bureaucracy and limited official funding.

Professors and students are generally positive about the change, but some are also concerned about how it might affect faculty rights and student costs.

The new system covers 29 public universities, but so far only three universities have started working under it. They are King Saud University, in Riyadh; King Abdulaziz University, in Jeddah, and Imam Abdulrahman bin Faisal University, in Damman. The three universities have a total of about 145,000 students in their various disciplines.

The system will be phased in gradually at the other universities, according to standards set by the Universities Affairs Council, which is the official higher-education regulator in the kingdom.

“The new system represents an ambitious bold step toward disciplined independence, which means moving away from government bureaucracy and toward more flexibility in taking decisions in favor of universities,” said Abdulrahman Al-Khorayef, the Ministry of Education’s under secretary for university education affairs.

While the new system seeks to reduce government spending on higher education, the new universities law kept education free of charge for undergraduate students. However, it allowed universities to impose fees for graduate studies as well as the possibility of making investments to develop alternative financial resources.

“The new system will not affect students, as free education or scholarships will not be affected,” said Al-Khorayef. “Still, it will give universities the freedom to seek sources of funding to enhance their resources. It will also give them a kind of academic independence so they can create new specializations, for example, according to their vision of the requirements of the labor market.”

Under the new system, universities will work to achieve programmatic and institutional accreditation from the Education and Training Evaluation Commission, or from one of the international bodies approved by the commission. (See a related article, “A Regional Survey: How Arab Countries Regulate Quality in Higher Education.”)

Part of a Broader Vision for Change

The new change comes in line with the kingdom’s Vision 2030, a strategic plan announced in April 2016, with the aim of reducing dependence on oil, diversifying the economy, and developing public service sectors such as health, education, infrastructure, entertainment and tourism. (See a related article, “Crown Prince Pushes Change in Saudi Higher Education.”)

“The new system is achieving a qualitative leap in Saudi higher education,” said Abdulrahman Saeed, a professor of psychology at Umm Al-Qura University, in Mecca. “This will contribute to the development of the research and educational process by increasing the volume of research spending by developing the universities’ financial and human resources.”

The kingdom now spends about 193 billion Saudi riyals ($51.5 billion) on education, equivalent to 19 percent of the total state budget for 2020, according to Saeed. The higher education budget is about 9 percent of the total, equivalent to 95 billion riyals ($25 billion).

Saeed believes that the intent of the new system is not just to reduce state spending on universities but also to transform universities from being institutions completely dependent on the state into institutions capable of developing their own financial resources and achieving administrative and academic maturity.

“These are serious attempts to break out of the guise of a rentier state dependent on oil, into a country capable of producing various resources,” he said.

Features of the New System

The new system granted universities independence in setting their financial, administrative and academic systems and regulations, and allowed them to seek sources of self-financing. It also authorized the opening of branch campuses in the kingdom for international universities, with the aim of increasing competition not only among local private universities, but with public universities as well.

The change also included the establishment of a Board of Trustees, which bears the responsibility for governance and ensuring the effectiveness and efficiency of the education provided by the universities, as it will control all of the university’s academic and administrative work, similar to what is in place in international universities. The board will supervise the nomination of a president for each university, the establishment of new colleges, in addition to a university council that is concerned with awarding academic degrees, appointing faculty members, approving university admission policies, and approving scholarship plans.

Another feature of the new system is reducing the powers of the University Council and transferring many of them to the Board of Trustees. The powers of university presidents have also been reduced, as this job will be purely administrative based on the direction and control of the Board of Trustees.

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The new university system has also reinstated the Supreme Council of Universities, which was responsible for university education before its cancellation in 2016. The council is responsible for approving policies, strategies and general directions for university education.

The Universities Affairs Council, headed by the Minister of Education and the membership of the ministries of labor, civil service and economy, determines the degree of readiness of universities that are suitable for implementing the new system, based on a number of indicators and criteria within three areas that include academic, administrative and financial aspects. The three universities that have been selected so far will have a one-year grace period during the transition to the new system, while the remaining universities will have two years to put the new system in place.

The new system opens the door for universities to establish and invest in companies or contribute to them, and to establish endowment programs from grants. It also grants them the right to charge fees to develop their revenues, such as imposing tuition fees for postgraduate programs, diplomas, training and educational courses, fees from non-Saudi students, and fees for doing scientific research or consulting services and opening branches abroad. At the same time, foreign universities are allowed to work inside the kingdom and enroll foreign students.

Many education experts agree on the importance of the new decision, but say it will take time to judge its efficacy.

“What controls the success of universities under the new system is their ability to build endowment programs that give them self-sufficiency in spending,” said Amal Al-Fawzan, a professor of curriculum and teaching methodology at Princess Nourah Bint Abdulrahman University, in Riyadh.

Al-Fawzan believes that the main goal of the new system is to diversify universities’ income and reduce dependence on government spending. However, she believes that this cannot come in one go, especially since the current allocations for the three universities, which have begun implementing the decision, amount to more than 25 billion Saudi riyals ($6.75 billion).

“Not all needs can be met at present through self-financing,” she said, “but it is a big step on the road to independence.”

Professors’ and Students’ Concerns

Although welcoming the new system, some professors and students are concerned about  changes universities may make in how they operate under it. Some believe that finding new financial resources for universities is not an easy task, while others raise concerns about student costs and the rights of professors and workers in academic institutions under the new system.

“I am afraid that the expansion and development in universities will be canceled, or that this will affect the salaries of faculty and staff employees if universities are unable to manage their expenses,” said Al-Fawzan. It will be difficult to maintain financial sustainability by relying on tuition fees from graduate or International students alone.

Another university professor, who asked to remain anonymous, expressed concerns about the future of professors and appointments, with the change of employing system.

“The new system gives universities the right to hire and employ staff according to the contracting system, and this threatens to lay off thousands of academics and university employees,” he said. “It may be misused by departments that may use it to pressure professors to work doubly without remuneration.”

Al-Khorayef, the under secretary for university education affairs, seemed more reassuring, as he confirmed that the achievements of faculty members and their rights are preserved within the new system.

“There is no prejudice to the rights of professors who are currently working,” he said. “Yet the new system gives universities the opportunity to attract new faculty members from abroad through contracts by increasing the financial compensation, which also means motivating the current faculty members to increase their scientific production.”

Rawan Al-Ghanim, a third-year student at the College of Computer and Information Sciences at King Saud University, believes that the new system will help the university to develop and compete with international universities. Yet she does not hide her anxiety.

“I am afraid postgraduate fees will be high,” she said. “This will impede many of us from completing our studies, which is what I really aspire to.”