Indonesian Parents Find It Harder to Pay for Children's College Tuition

KOMPAS/PRIYOMBODO (PRI)

Registration room for new students at Budi Luhur University, South Jakarta, Tuesday (22/6/2021).

The increase in salaries among Indonesians is not able to offset the cost of higher education for their children in the future. The increase in the average cost of college education is higher than the increase in salaries.

JAKARTA, KOMPAS — In the future, it will be increasingly difficult for Indonesian parents to pay for their children's college tuition. The increase in the cost of higher education is not matched by the increase in people’s salaries. Not all families can support their child’s education through college graduation, even if they have saved for education funds since the child’s birth.

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Kompas analyzed and combined data of wages for high school and university-graduate workers from the Indonesia Statistics (BPS) from 1995 to 2022 and examined tuition data from 30 state and private universities (PTS) as early as 10 years ago (2013-2022).

Data on wages for high-school-graduate workers is used as a representation of the financial ability of households who want their children to have better opportunities than their parents. Meanwhile, data on the cost of education is collected by taking the average sample from the study program (prodi) with the highest and lowest tuitions.

For PTN, the growth is around 1.3 percent per year and for PTS, 6.96 percent.

For example, for Pelita Harapan University, the sample of study program being taken is Medical Education as the highest and Information Systems as the lowest. With historical data on the cost of higher education for the last 10 years, the cost of future studies is estimated to increase by 6.03 percent per year. This growth is the average cost of PTN and PTS. For PTN, the growth is around 1.3 percent per year and for PTS, 6.96 percent.

This situation cannot be offset by the increase in the wages of parents who have high school and university backgrounds, which are only 3.8 percent and 2.7 percent per year, respectively. This means that there is a flattening of income compared to the hike in the cost of higher education. As a result, if parents who have a high-school background set aside 20 percent of their income from the time their child was born until they graduated from high school – or, in other words, set aside savings for 18 years -- it would not be enough to help their child finish college. For example, the tuition fee for the class of 2022 students is an average of Rp 149,863,850 (US$10,021) for the eight semesters before they graduate. However, the accumulated savings that his parents collected over the 18 years from 2004 to 2021 only amounted Rp 72,534,314. This means that this fund can only cover 48.4 percent of the total tuition fees or the equivalent of paying only four semesters.

KOMPAS/DEFRI WERDIONO

New students of the University of Muhammadiyah Malang listening to a public lecture, Monday (2/9/2019)

On the other hand, households with one source of income for university graduates in the same period could save Rp 156,553,949 or 104.5 percent of the child's tuition fees. Meanwhile, in 2040, or when those born in 2022 start looking for a university to attend, the savings that have been collected by parents with a high-school-education background for 18 years is Rp 177.2 million. This fund will only be able to pay for three of the eight semesters or only 41.2 percent of their child's tuition fees.

For parents who graduated from university, the savings collected is greater, Rp 299.2 million. However, it only covers the cost of their child's higher education for 6 semesters or 69.6 percent of the tuition fee.

This situation causes the poorest 20 percent of Indonesian people to have the lowest participation in higher education. Only 12.42 percent of them received higher education during the last five years (2017-2021). This is far behind the middle group of Indonesian people whose participation rate is almost twice as high (21.7 percent).

The sole income from her father, who is a retired civil servant, is Rp 3 million, half of which is for Theresia's tuition fees.

Theresia Mutiara (22), a private-university student from Bantul, Yogyakarta, is one example of a person who has difficulty in paying tuition fees. The sole income from her father, who is a retired civil servant, is Rp 3 million, half of which is for Theresia's tuition fees. The rest is for daily needs. “Once, I couldn't pay UKT [university tuition]; there really wasn't any money. Finally, my father and mother borrowed money from the bank," she said.

Responding to this finding, the Director General of Higher Education at the Education, Culture, Research and Technology Ministry, Nizam claims that the cost of higher education, especially PTN (state university), will actually be more affordable in the future. “Even if there is an increase, it is still below inflation. In fact, in these three years there has been no increase in UKT at PTN," he said in a written statement, on Monday (25/7/2022).

Good trend in the last decade

Kompas' analysis also shows that over the last 10 years, accessibility to higher education has expanded as a result of the trend of increasingly affordable tuition fees. This can be seen in the class of 2013 students, where 18 years of savings from their high-school-graduate parents only covered 42.6 percent of tuition fees. In the batch of 2022, the figure is 48.4 percent, an increase of 5.8 percent.

In the segment of parents who graduated from university, for children who went to college in 2013, the savings could cover 91.9 percent of the costs. Now, for the parents of students of the class of 2022, the savings amounts to 104.5 percent of tuition fees.

KOMPAS/RIZA FATHONI

Visitors packed the Plaza page of the Ministry of Education and Culture, Jakarta, during the World Indonesia Scholarship Forum, Saturday (11/8/2018).

During the 2016-2021 period, BPS also recorded the growth of higher-education participation among the lowest-income people. In 2016, only 6.82 percent of the poorest group of people had tertiary education. Now, in 2021, the number has increased to 15.96 percent or an increase of almost 1.5 times.

The existence of financial-assistance schemes, including scholarships for the poor, paved the way for them to go to college. Rachel Hosanna (28), a graduate of the Faculty of Economics and Business at the University of Indonesia, was one of the beneficiaries. She entered college in 2011 with a Bidikmisi scholarship. Without this help, her father's income as a motorcycle-taxi driver would not be able to pay her tuition fees. What's more, Rachel still has three younger siblings who need their schooling to be paid for. “I am optimistic that the lower-middle class can continue their studies. But this needs to be supported by financial and non-financial assistance to compete with children from the middle-to-upper-economic strata," she said.

Currently, the government is reviewing the student-loan scheme, one of which refers to the one implemented by the Australian Government, namely deferred payment or paying behind.

Nizam said that universal access to higher education could be achieved through a student-loan scheme. Currently, the government is reviewing the student-loan scheme, one of which refers to the one implemented by the Australian Government, namely deferred payment or paying behind.

“With this scheme, students' tuition fees are paid after graduation and they have sufficient income through the tax system. If implemented, access to higher education will be universal for all members of society,” he said. (PUT/XNA/SPW)

(This article was translated by Kurniawan Siswo)