International short-term consultant on International good practice in the financing of tertiary education (TVET and Higher education)

TERMS OF REFERENCE

For International short-term consultant on International good practice in the financing of tertiary education (TVET and Higher education) Grant facility for project preparation (GFPP) – Uzbekistan Student Loan Program I. Background The Government of the Republic of Uzbekistan is implementing comprehensive reforms aimed at expanding equitable access to higher education and strengthening the effectiveness, sustainability, and inclusiveness of student financing mechanisms. As higher education participation continues to increase, ensuring adequate, equitable, and effective financing has become a key priority to support equal educational opportunities and long-term sector development. To support these reforms, the Grant Facility for Project Preparation (GFPP) represents a strategic investment of US$2 million, financed by the World Bank, to support the preparation and implementation readiness of the Student Loan Program in Uzbekistan. The GFPP finances analytical studies, institutional capacity building, implementation support, and policy development to establish a sustainable and efficient student financing system. The facility supports comprehensive analytical work to assess the current student financing landscape, conduct stakeholder consultations, evaluate international good practices, and develop evidence-based policy recommendations. It also strengthens implementation capacity through the recruitment of specialized Project Implementation Unit (PIU) staff and fiduciary experts, while supporting national and international training programs for representatives of the Ministry of Economy and Finance (MEF), the Ministry of Education and Science (MoES), and other relevant stakeholders. These reforms take place in a context of rapid expansion. Gross enrolment in higher education rose from 9 percent to 21 percent between 2016 and 2022, the number of HEIs grew from 70 to 194, and the Government aims to reach 50 percent enrolment by 2030. Admission is still largely managed through centrally set quotas of places, which are increased every year.2 Public spending on tertiary education has risen more than fivefold in five years to about 0.89 percent of GDP, close to the OECD average. However, the financing model continues to rely heavily on households: around 68 percent of public higher education institutions’ (HEIs’) revenues come from tuition fees; free (state-funded) places, held by about 17 percent of students, are allocated on admission test scores and benefit mostly students from middle- and higher-income families; and government funding to HEIs is based on enrolment alone, so it does not reward labour market outcomes, curricular innovation or industry links.1 The regional “dual-track” model of budget-funded and fee-paying places, combined with centralised quotas that may not correspond to demand for specific programmes, has been found to create an incentive for institutions to retain fee-paying students at the expense of academic standards.2 World Bank analysis has pointed to a package of system-level financing reforms, including a transparent funding formula that combines enrolment with performance on strategic indicators, competitive grants, diversification of institutional revenues and reform of student financial aid. These reforms depend on greater institutional financial and academic autonomy and on reliable data on graduate outcomes.1 The Government recognizes the importance of evidence-based analysis to inform future reforms of the financing of tertiary education, covering both technical and vocational education and training (TVET) and higher education (HE). It also places high value on learning from good practice in relevant and comparable international cases, so that design choices for Uzbekistan are informed by what other systems have done, what results they achieved, and under which conditions. II. International good practice and strategic choices in tertiary education (TVET and HE) financing Financing systems are not neutral. How public and private resources are allocated to institutions and students – for example through negotiated or input-based budgets, enrolment-based or formula funding, performance-based funding, competitive and grant-based funding, or cost-sharing with students and employers – and the legal and institutional framework that governs these flows shape what is incentivised in the system. Over time, these choices influence which models of TVET and HE emerge (for example, broad mass access versus a more differentiated system with centres of excellence; demand-led versus centrally steered provision; the balance and pathways between TVET and HE), and which outcomes the system tends to produce in terms of access and equity, completion, quality, labour market relevance, research, and the sustainability and predictability of public spending. International experience shows that similar arrangements can lead to very different results depending on their design, on how they are combined, and on the institutional context in which they operate (e.g., system governance, institutional autonomy, quality assurance and data systems). A related question for Uzbekistan is how to manage the number and distribution of places. Several countries have moved away from centrally set quotas for students entering TVET and HE, and the experience of these transitions, including the financial incentives and changes in funding allocation that made them possible, is directly relevant. A structured review of selected international cases will help the Government consider which options, or combination of options, best fit Uzbekistan’s strategic intentions for the sector, and what adaptations would be required. III. Objectives The objective of this consultancy is to support the Ministry of Economy and Finance (MEF) and the PIU, in coordination with the MoES and other relevant stakeholders, by carrying out research on international good practice in the financing of tertiary education