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General education school In the period between 1990 through 2002 the number of schools changed slightly in comparison with the number of students. The num ber of students went down from 20.3 to 18.4 million persons, i.e. by per cent (see Table 9) Statistical collection Education in Russia. 2003.

Table Number of general education establishments in Russian in 19902002 and the number of students 1990/91 1995/96 1997/98 1998/99 1999/00 2000/01 2001/02 2002/Number of day education establishments (by the be- 67,571 68,970 68,432 67,889 67,550 67,063 66,833 65,ginning of school year) Number of students in day general educational establishments (thousands of 20,328 21,567 21,733 21,479 20,879 20,074 19,429 18,students by the beginning of school year) Source: Russian Regions. Socio economic indicators. 2003. RF Goskomstat, 2003.

Table Funds appropriated under the consolidated budgets of the subjects of the Russian Federation for general education on a per student capita basis Indicators 2000 2001 2002 Actual funds appropriated under the consolidated budgets of RF subjects for general education on a per-student-capita basis Average value across RF subjects, in thousands of 8.0 10.0 10.8 12.rubbles Minimal value, in thousands of rubbles 3.2 4.4 6.7 6.Maximum value, in thousands of rubbles 44.8 64.4 73.5 90.Level of differentiation 14.5 14.6 10.9 13.Funds appropriated under the consolidated budgets of RF subjects for general education on a per-student-capita basis taking into account regional coefficients of rise in prices for public services Average value across RF subjects, in thousands of 4.6 7.2 10.3 9.rubbles Minimal value, in thousands of rubbles 1.6 2.5 4.2 4.Maximum value, in thousands of rubbles 13.4 18.6 19.3 17.Level of differentiation 8.4 7.5 4.6 3.The number of schoolteachers grew following the growth of the number of students up to 1998/1999 and then it began falling but not so sharply as the number of students.

Clear differentiation in weighted expenditures across the subjects of the Russian Federation remains the same with respect to the general education system (Table 10).

Foundation Centre for Strategic Research estimated efficient re quirements in budgetary funds per a general school student while de veloping The Strategy of the Development of Education in 2000. Ac cording to that estimate in all Russian regions budgetary financing does not cover efficient normative per student capita. And so, one of the ini tial tasks of the reform of the general school system should consist in attracting extra budgetary funds and create favourable conditions for increasing the number of extra budgetary funding sources for schools.

Initial and secondary vocational education Both the number of initial vocational education establishments and the number of students in them went down by 11 per cent15 from through 2000. In spite of the fact that the initial vocational education offers its own product and services, it attracts the lowest volume of ex tra budgetary funds in comparison with other systems of vocational education and constitutes only 1112 per cent in the overall volume of funding (for comparison the volume of extra budgetary funds in the overall volume of financing of schools constitutes 2025 per cent). Ac cording to the data of the RF Ministry of Education and Science delega tion of financing of the initial vocational education establishments to the regional budgets will result in the reduction in the volume of budgetary funding. For example, in 2004 the volume of federal budget expenditure on a per student capita basis in initial vocational education establish ments constituted twenty four thousand rubbles. The volume of budg etary expenditure of the Samara oblast, which in the early 1990s ac cepted financing of initial vocational education establishments from its budget, could allocate only eleven thousand rubbles per student capita. In comparison with other 18 RF subjects, which accepted fi nancing of initial vocational education establishments from their budg ets the volume of funding in Samara oblast is the highest.

Outdated material and obsolete technical basis become one of ma jor problems of initial vocational education system. As a result, the graduates are incapable to work on modern equipment and machinery.

Source: Russian Regions. Socio economic indicators.2003. RF Goskomstat, 2003.

In turn, employers are not interested in contributing to financing initial vocational education establishments because the graduates immedi ately after graduation are drafted into the army. As a result, the system of training skilled labour force becomes a reservation for unfortunate teenagers and this issue will become more urgent when financing of initial vocational education establishments will be delegated to the re gions.

The system of secondary vocational education posted a sustained growth regarding the number of students16, which in many respects is explained by accessibility of secondary vocational education establish ments for teenagers from low income families. Having received secon dary vocational education they either enter a college (they have the right to directly join the third year of the similar type of college) or go to work (in many cases they simultaneously study by correspondence in a college). Thus, teenagers from low income families take more time in receiving higher education. In order to attract more students secondary vocational education establishments create unrelated specialties (eco nomics, management, law, etc.) increasing the volume of low quality education.

Nowadays secondary vocational education graduates face one more problem. This problem is that they are not in demand on the labour market. College graduates (for the same pay employer can get a worker with a higher level of education who will do the same job but with better quality) and initial vocational education graduates (they have bet ter practical skills) are more competitive.

University and college education Serious reforms in the sphere of higher education in Russia started in the 1990s. These reforms touched both organizational structure its institutional organization and financing issues. Educational establish ments network of higher professional education (both public and non public) was quickly growing lately. At present, the number of public higher learning institutions reached 655. This is an increase by 27 per cent in comparison with 1991 level. This is a paradoxical fact taking into account budgetary financing crisis. The number of nonpublic institu tions of higher learning surpassed 400. The student contingent in non Source: Education in Russia, 2003. RF Goskomstat, 2003.

governmental institutions of higher learning constituted 13 per cent of the overall number of students in Russia. However, affiliated branches network of public and nonpublic institutions of higher leaning was grow ing at a higher pace. The number of affiliated branches of public institu tions of higher learning came to 1371 at present and nonpublic 326.

The growing number of high school students generated unprece dented growth in the number of institutions of higher learning. Between 1995 through 2004 student enrolment only in public institutions of higher education went up 1.5 fold. This is explained by the situation ac cording to which the majority of citizens consider higher education as a social norm. According to social surveys17, 89 per cent of respondents think that it is a must to get a higher education in modern life. Moreover, a new social norm is gaining strength: 20 per cent of the respondents think that a person should get two college educations. In big cities this indicator reaches 25 per cent and in families of scientists and techni cians this indicator comes to 28 per cent.

At the same time, student enrolment that studies at the expense of budgetary funds was growing slowly. The main increase falls to the share of paid students (see Fig. 2). In the year 2000 the number of first year students in public universities and colleges studying on budgetary and paid basis was equal. In the year 2004 the share of enrolment to public institutions of higher education on paid basis went up to 57 per cent. The share of enrolment to public institutions of higher education on budgetary basis went down to 43 per cent. The number of paid stu dents in the overall number of students in public institutions of higher learning closely reached a half, constituting 48 per cent. Taking into account nonpublic sector in the year 2004 the share of student in Rus sian institutions of higher education who pay for their education comes to 58.9 per cent.

See Analysis of accessibility of college education for socially vulnerable groups, NISP, 2003.

Dyanmics of enrollment to higher education establishments on budget and Share of budgetary and paid student in paid basis (thousands of persons) 15% 586,550,5 564,565,531,9 544,553,287,85% 182,Budgetary students 112,93,Paid students 2000 1995 1996 1997 1998 1999 46% budgetary student paid student 54% Fig. 2. Enrollment of students in state higher educational institutions on the budget and paid basis Public universities and colleges receipts from paid students consti tuted about 1.7 billion dollars in 2003. Meanwhile, federal budget ex penditure on college education in the same year slightly surpassed the sum of 1.8 billion dollars. Thus, extra budgetary receipts constitute per cent in the overall volume of funds received by public universities and colleges. In prestigious universities and colleges, which, at the same time, receive more public funds on a per student capita basis in comparison with common universities and colleges, the share of extra budgetary receipts constitutes 70 per cent.

In some highly subsidized regions with young and fast growing population (for example, Republic of Adygeya, Republic of North Os etiya Alania) growth of the number of students per 10,000 of the popu lation surpasses the same indicator across Russia18. In those regions the system of university and college education carries out an additional social function temporarily reducing the acuteness of youth unem ployment issue. However, due to low territorial population mobility and low quality of received education, one should expect serious problems with employment of the graduates, which will let themselves known in the near future.

For some years to come growth of the number of students in univer sities and colleges will remain. However, in the future as a result of population crisis the number of school leavers will sharply fall and the decline in the overall number of students will follow. This will lead to a reduction in the universities and colleges network.

One can separate three stages in the budgetary financing of Russian higher education during last 15 years. In the early 1990s expenditure share on university education in GDP fell sharply from 0.81 per cent of GDP down to 0.27 per cent of GDP in 1998. This indicator began quickly growing in 2001. Federal budget expenditure on university education reached 0.41 per cent of GDP in 2003. However, rehabilitative expendi ture growth on higher education started to slow down in 2002.

In the period of growth budgetary expenditure per budgetary stu dent grew considerably slower and lagged behind the same type of ex penditure on other levels of educational system (see Fig. 3) This is connected with the continuing growth in the number of stu dents. We should also take into account the fact that the growth in the overall number of students in public universities and colleges resulted in the fact that presently 219 students per 10,000 population receive their education at the expense of the budgetary funds. Legislatively de termined norm constitutes 170 students per 10,000 population who study at the expense of the budgetary funds (see RF Law On Educa tion, Article 40). However, had 170 students per 10,000 population studied at the expense of the budgetary funds, efficient requirement of public universities and colleges in funds would have been satisfied by about 26 per cent.

Source: Education in Russia, 2003. RF Goskomstat, 2003.

21,21,20,20,19,18,17,17,16,16,15,15 14,13,12,11,Preschool education General education Primary Vocational Secondary Higher training Vocational Vocational training training 2002 2003 Fig. 3. Budgetary expenditure on education on a per student capita basis by levels of education in 20022004 (thousands of rubbles) The shortage of financing of higher education is evidently demon strated in comparison with the OECD countries. For example, according to the OECD data expenditure on vocational education by purchasing power parity in US dollars in 2001 per student capita constituted: in the USA 22 thousand, in Great Britain 9 thousand, in France 7.5 thou sand, in Germany 7 thousand, in Hungary 6 thousand, in Poland thousand19. In Russia according to the RF Ministry of Education and Science this type of expenditure constituted 2.5 thousand US dollars per student capita by PPP in 2004. Thus, Russia is lagging behind by this indicator not only the developed countries but the former countries of the socialist block, as Hungary and Poland.

1.2.3. Reform of the financing system of the college education In the process of development of the Strategy of the development of education in 2000 the use of normative per capita financing in the form of government personal education loans (hereinafter GPEL) was pro posed. It was done with the aim of improving the efficiency of budgetary Education at Glance, OECD, 2003.

funds when there is a shortage of public financing of the higher educa tion. Besides, introduction of GPEL should have contributed to the re duction of the shadow sector in the educational system and corre spondingly reduce household costs in overcoming a barrier school college education as well as guarantee equal opportunity for the col lege education for the children from different strata and groups of population. And finally, by the time of drafting of the Strategy of the de velopment of education the Government formed an idea aimed at in creasing budgetary financing of education and preserving its existing model. Increasing the efficient use of available resources by way of amending financing mechanisms was the necessary requirement for increasing budgetary expenditure on education.

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