Economist: Time to change Gate funding

Economist Dr Roger Hosein says the Government needs to be more prudent in its delivery of the Government Assistance for Tuition Expenses (Gate) programme. He said it should consider an income contingent loan programme or a graduate tax programme so students repay the fees for their tertiary level education. Hosein said tertiary level funding must be approached differently in the 2014-2015 fiscal budget, which would be presented by Finance Minister Larry Howai on September 8.

While Gate has helped improve tertiary level education (TLE), Hosein said there was need for streamlining of the programme “to ensure some degree of alignment of free tertiary level education to the longer term structural needs of the economy.” In the last eight years, $4.5 billion has been spent on Gate. The figure jumped from $102.1 million in 2004-2005 to $757.6 million in 2012-2013, mainly due to an increase in students’ enrolment, Hosein said.

“It is difficult to say that past governments have pumped too much into Gate. What I would say is that we need to consider more sustainable options to fund TLE without marginalizing students from lower income groups.” Although Gate has increased the number of tertiary level students, “it did not dramatically improve the overall growth performance of the economy, after 2008 in particular, when it was most needed,” he said. 

In addition, he said, Gate had not as yet translated into a diversified production base for the economy and some sectors remained underserved. “We seem to be still importing nurses and doctors. However, this may also be due to migration in part because Gate is not linked strategically to the development process but is rather a universal approach to TLE. Funding those areas that have peculiar needs or needs that require a greater degree of emphasis may be underserved,” he said 

Hosein said his main concern was that Gate was vertically inefficient. “This means that some people get more funding than they need. In the case of T&T, some evidence of vertical inefficiency is seen in the type of households accessing Gate. “It can be seen that income groups earning $9,000 or more access Gate funding at a higher percentage than those in which the income group is less than $9,000.”

Of particular interest, Hosein said, was the income group $17,000 to $18,999, of which 7.9 per cent accessed Gate funding, while only 0.5 per cent of the income group earning less than $1,000 accessed Gate. Hosein does not believe the Government should scrap Gate.
“No. It can’t be that simplistic. I commend Tertiary Education Minister Fazal Karim for all the innovative changes he has brought on stream so far. “Tertiary level funding in my view just has to be approached differently. The word scrapped is too dramatic.”

Hosein said the economy was at a crossroad and “it’s time to cut back on the huge transfers and subsidy outlay that the State currently undertakes.”