There is a worldwide trend in higher education toward privatized financing. Against a background of declining public resources, students and their parents are increasingly expected to assume a larger share of the cost of higher education. Among recent backers of fee-paying higher education are those countries undergoing the transformation from a planned to a market economy.

According to the 1993 constitution, citizens of the Russian Federation are entitled to tuition-free higher education. Drawing on the Soviet model, the constitution stresses such social values as equality of access, social mobility, and meritocracy. Developments in Russian higher education today are increasingly shaped by financial pressures. Severe shortages of public monies make the former practice of full public support for higher education not only undesirable but impossible. The issues of charging tuition fees and distributing the costs of education among multiple parties--private and public employers, local governments, and students themselves--have been placed on the policy agenda. As early as 1992, the Law on Education introduced the concept of higher education cost sharing that was complemented by a loan plan similar to the one in use in the United States. Since that time, however, tuition and loan-scheme proposals have alternately moved in and out of policy discussions.

With an eye to urging more efficient use of resources and more responsive behavior among education providers, proposals for indirectly rather than directly allocating taxpayer funds to Russian higher education institutions were introduced as early as the mid-1980s. Contract training--a targeted training of graduates for particular public industries and enterprises--was intended to bring additional resources to education. But this was a quasi-tuition model and had little effect on institutional behavior, as the costs of training were offset by direct allocations of public funds to postsecondary institutions. Ultimately, the reform efforts failed to achieve their targeted goals. They did, however, set a precedent for a disguised tuition charge to be carried only by sponsoring businesses or organizations--rather than by individuals.

In the early 1990s, due to the emerging private economic sector and the opening up of the country to the rest of the world, the demand for persons trained in law, economics, and business administration and those who had workable knowledge of foreign languages and computer skills rose sharply. The 1992 Law on Education allowed private higher education institutions to charge for the full costs of training, and the law split admissions to public institutions into two categories: tuition-free (state-supported), and tuition-charging (sponsor-supported). The split admissions arrangement did not violate either the constitution or the Law on Education, since fees were charged only of people seeking a second higher education diploma or those close to meeting competitive entrance requirements. On occasion, qualified individuals who could afford to pay the tuition out of their own savings were unable to find a sponsoring business or organization with which to establish a higher education contract.

By 1994 students and their families were expected to reimburse their sponsors, who acted as intermediaries. This practice was stopped by governmental decree in spring 1994, and self-financed students were given legal status. Thus, tuition has become an essential part of public institutions. With even more students willing to pay for their education, public higher education institutions have come to view charging for educational services--both degree and nondegree--as a way to generate additional revenues. Concerns have been raised lately, however, that this source of income may dry up since, by some estimates, the average annual tuition fee exceeds the average monthly pay by a factor of 20.

The costs borne by students can vary greatly, depending on several key factors:

In the absence of any student-loan plan, tuition-charging institutions are beyond the means of most public-sector employees. Reasonable tuition charges and a student-loan plan are considered to be the most effective policies for promoting quality, equity, and access. Since the introduction of the concept of student loans in the 1992 Law on Education, however, no practical programs have been proposed. The recent reform initiative envisages loan schemes in the long term. In the short term, the initiative focuses on tighter mechanisms for the distribution of public funds, similar to the arrangement with student grants. Some say this would be feasible only if both high school graduation exams and university-level entrance exams were abolished, and replaced by nationwide standardized testing. However, the cost of implementing this change is as yet unknown.

The long-standing tradition of tuition-free higher education for students in Russia has begun to break down as severe state austerity and the development of market relationships in the area of educational provision continue. Forced to recognize the reality of self-financed individuals as opposed to those sponsored by private and public enterprises, state authorities and policymakers have authorized a policy that allows tuition to be charged. Meanwhile, recent policy proposals and the actions of individual institutions reveal an inclination to nibble at the problem rather than to solve it. In this climate of indecisiveness there is much room for the pursuit of conflicting individual interests.