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It should be noted that at its first stage the transition to the mass education leads to a decline in its quality vs. the heyday of the prior (non mass) model. This phenomenon was noted in the time the primary general education became the mass one, as well as the secondary education passed through this transformation. Nowadays, the similar situation is noted in the area of higher education, and it is a universal phenomenon for all the nations that undergo the transition to the mass higher education. The US experts formulated the process as the princi ple of development of the education system as follows: a quality edu cation for a few a lower quality education for everyone a quality education for many a quality education for everyone. In Russia, the transition to the mass higher education coincided in time with a drastic decline of budget financing. That is why the decline in the quality of education is associated primarily with the shortage of funds, rather than a change of the model of higher education, which seriously complicates the public debate on the short term strategy of development of the higher school.

The change of the models of both higher education and the whole system of professional one involves particular implications for the teen agers who, because of the variety of reasons, fail to complete the sec ondary school course in full and currently enrol in Russian analogue to professional colleges. Ideally, such public secondary education institu tions should give them a workers profession or the one demanded by the sector for services, but with the focus on technological culture, a strict following to instructions, labour discipline, safety measures, etc.

These educational elements are currently neglected, which is why it is so hard to the cutting edge technologies to take roots in Russia As the technological and management cultures, together with political stability or economic growth rates, form critical elements of investment climate, they are formally or informally considered in the course of decision making with respect to investing in a country.

Despite the lack of its social and economic profitability, today it will be very hard to stop the transition to the 12 year schooling and profile education in high school. Meanwhile, the transition in question can complicate the abandonment of the outdated vocational training model and its replacement with a more modern, socially and economically demanded model of the professional and, particularly, higher educa tion.

Let us now consider a variant under which only the most talented and the most needy will be eligible to a free higher education. The gov ernment will be able to cover costs of their university tuition, given their number, as noted above, can be estimated at the level of 810,000.

This measure is regarded as a struggle for a qualitative higher educa tion and as an instrument of improving the efficiency of the education sector as a whole. The suggested system also allows the introduction of GPEL which is understood as a standardized per capita financing of higher education, to be used exclusively as a means of allocation of funds between universities, rather than as an instrument of the differen tiation of budget expenditures and the populations spending on higher education due to the USE results. In such circumstances an urgent problem arises as to how much the government should pay to a given university for tuition of a student. Today, presidents of the most self sustainable (prestigious, professional) universities argue that the an nual minimum respective costs account roughly for 90 100,000 Rb.

per student capita (the assessment is valid for humanitarian and eco nomic departments), while the amount soaring up to 120150,000 Rb.

a year, as far as technical specialties are concerned. For more conven ience, let us further adhere to the average annual amount of 105 125,000 Rb.

Had the transition to this principle of financing been accomplished in 2003, the budget would have financed tuition of 85100,00 students (out of 1,300,00 of them), i.e. 6.58% of the overall number of en rolees, or 13 16% of the current budget sponsored enrolment.

According to the data of monitoring of the education economy con ducted by the State University the Higher School of Economics, today Russian families spend roughly as much as Rb. 2.7 bln. to overcome the school university barrier, while on paying for tuition of the 1st year university students they spend a. Rb. 12.7 bln. Assuming the existence of a valuable USE system, 40% of what families currently spend on pri vate pre university tuition and enrolment bribes would be spent for the same purposes, but at the USE level, while another 60% would be spent on paying for the university tuition. Consequently, the aggregate effec tive demand for services of the sector for higher education would ac count for Rb. 28.9 bln. a year.

As noted above, the number of the most talented university enrolees accounts for 810,000. Plus, there are those who will get excellent USE marks, i.e. score between 80 to 100 marks. According to the 2002USE results, they should account for another 22.5%. As we have al ready included a part of them into the group of the most talented, the actual number of students falling under these categories may account roughly for 35,000. The remaining 5065,000 students are represented by the most needy (how to select them forms a separate and fairly complex issue) and military staff who will have completed their contrac tual term and retired by the time of the enrolment. Let us suppose that 2025,000 of them would go to Moscow or St. Petersburg, while the others would be enrolling in provincial universities.

At this juncture provincial universities would admit 1015,000 of the most talented and 5065,000 of the most needy students, for whose education the budget would be supposed to pay 105125,000 Rb. per capita. The provincial universities presently charge a 15,000 Rb. tuition fee, which means that in the event they provide their services to 80,students, they would collect an equivalent to the amount they currently receive for educating 560883,000 students.

Hence, given the tuition costs equal 105125,000 Rb., the effective demand would allow to provide tuition to another 230275,000 stu dents.

Today, one fourth of the contingent, at least, those who receive a regular, day, form of education, or 25% of all the newly enrolled stu dents, or 175,000 of them, falls on Moscow and St. Petersburg. That means that another 150,000 of them would be able to enrol on the paid basis in universities located in these two cities. Accordingly, there would remain another 80125,000 students to enrol in provincial universities, which are equivalent to the current 600875,000 students. Thus, the aggregate volume of funds the provincial universities would be collect ing would be well in excess of what they get now. It is quite another mat ter how the demand would be distributed across regions, for in physical terms the admittance of the maximum of 205,000 students should sub stitute for the current 975,000.

It should be noted that under such a scenario Moscow universities would find themselves in a difficult situation, with the leading universi ties being on the verge of recoupment, while weaker ones being com pelled to contract their admittance drastically if they failed to lower their prices (today commercial students may not pay less than the budget does).

Thus, it may become fairly possible that the budgetary admittance will be concentrated in a small number of leading universities, while the Rb. 28.9 bln. worth effective demand will be distributed between other universities that would set absolutely different prices for tuition. With the average costs of university education amounting to Rb. 24,000, the number of commercial students would make up 1.2 mln. Accordingly, the overall admittance once again (with account of the budgetary stu dents) would make up 1.3 mln. Students. So, the system will most likely to adjust to the proposed modifications and retain the mass higher education, albeit with a greater social tension. Plus, the budget would have to pay for the 12 year schooling and the profile education. Thus, the above variant of the transition to the USE GPEL (providing the si multaneous refusal of the 12 year schooling and the profile education) appears more efficient.

An analogous computation can be conducted for the situation ex pected to occur in 2009. It shows that under the transition to the budget paying for education of the most talented and most needy students the higher learning system would be either downsized with hardly foresee able consequences for many regions and the system itself, or retain the mass (general higher education), along with a separation from it of a small budget part of the professional and prestigious education (7 9%). However, this particular variant considerably changes the princi ple: budget would be paying for the prestigious and vocational training, while a great part of the population for the general higher education.

That does not make it clear enough who (the population or the govern ment) would be paying for a further professionalization of 90% of the young. Hence, this is a logical, but inefficient reform option.

Whilst the mission of financing the 12 year schooling falls on the re gional and local budgets, there can arise an impression that the issue should not involve a great deal of saving and comparisons with the fed eral budget expenditures on education, for they form different pools of funds. We believe, however, there could be found a more efficient con sumption of the regional and local budget resources. First, they can be used to boost spending on education in other school forms (to increase the per capita standard in 110 forms of the secondary schools). Sec ond, regions could use these funds to support children from the needy families that would fall into the group of the most talented students (to cover their hostel fees and additional scholarships, for example) and to provide the most needy children with an access to the general higher education within the region (additional subsidies to complement the federal GPEL, among others). In addition, these funds can be used to modernize education institutions of the PVT system that are supposed to be assigned to the regional level.

The tasks of reforming the system of the primary and secondary vocational training As formally different types of PVT and SVT institutions currently often deliver the same curricula, the structure of vocational training has lost its coherency. Having lost their ties with employers and suffering from an outdated material and technical base, vocational training institutions are no longer able to ensure training of staff of a necessary qualification to be employed by the modern economy and social sphere. And if it were not enough, the PVT system is overburdened with social obliga tions: a considerable part of the so called problematic young concen trates in institutions of this particular type, which is why their social mis sion often prevails over the task of training of highly qualified personnel.

Most employers cite a serious shortage of worker cadre, while between 15 and 30% of professional college graduates fail to find a profile job.

To ensure a modern quality of training in the vocational training sys tem, it is necessary to:

- Secure conditions of interaction between enterprises and educa tional institutions in the area of organization of and control over the education process, which should be built on the modern techno logical base. It is also necessary to shape mechanisms of financial and economic encouragement of processes of employers invest ment that would be aimed at ensuring such an integration;

- Legally divide the mission of social support to students from those of provision of the higher education and organization of vocational training;

- Create organizational and legal conditions of introduction of educa tion programs of this particular level to the system of continuous vocational training.

Securing the innovation nature of the education sector The requirements presented by the knowledge based economy necessitate creation of conditions of casting a national innovation sys tem, which should become capable of ensuring the integration of the spheres of education, research and economics. It is equally necessary to overcome a constant backwardness of the educational system from the knowledge and technologies that underlie the modern society.

As far as the provision of the innovation nature of development of educational activity is concerned, most success stories are presented by such institutions of higher education that simultaneously implement three types of processes:

- Development of projects associated with designing various tech nologies and developing enterprises, industry branches and sec tors of the economy;

- Conduct of both fundamental and applied research;

- Design of educational technologies that ensure an integration of project and research tasks into the educational process.

Creation of and support to education programs that comprise the above characteristics become priority tasks of securing the innovation nature of development of education.

The innovation character of education should be secured at all the levels of education by introduction of new educational technologies, development of interactive forms of tuition, a broad use of project methods, simulators that allow imitation of real situations, and modern training computerized programs.

So long as the complex of measures aimed at improvement of the quality of education is concerned, the vocational training system should see its general mission in developing, together with employers and the general public, and introduction of modern methods of building ratings of educational institutions operating in the niche of vocational training.

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