Cost of Free Higher Education in Malaysia

Recently, TS Annuar Musa made this outlandish claim that Pakatan's free higher education idea would an extra RM60billion. 

Firstly,there are roughly 700,000 students in Private Higher Education Institutions(IPTS).
This consist of students from certificate level all the way to PhD.

Enrollment in 2016(MOHE, 2017)

Source : Msian Higher Edu Blueprint 2015-25

Most sensible mechanism would be a voucher system with cost per student bench-marked against IPTA.  Average operating cost per full time student in public institution(public uni, polytechnic,community college) was RM18,100 in 2014. Using CAGR of 3.7%(based 2006-14),the cost per per full time student in 2018 wld be RM21,000.

This brings it to RM14.7billion for 700,000 students from Certificate to Phd level in private institutions.

For students in govt institutions, 89% of their cost is already covered via general taxation.
In 2014, students contribution(fees) was an average RM2000. Using 3.7% CAGR , that wld be RM2300 in 2018.  There was approx 652,000 enrolled in govt institutions which means an extra RM1.5billion here.

This would bring total additional cost RM16billion p.a as opposed to RM60billion.

There are few additional points I like to make in regards to this.  

• Mechanism for this should be via a single fund under MoHE(allow flexing of buyer power to set fee cap to ensure efficient pricing).
• Pakatan also should pledge reversing the growth in IPTS by pledging to build more IPTA(BN  pledge to underinvest in IPTA, ensuring IPTS share from 45% to 53% in 2025.BN targeting annual growth in IPTS students at 5.1% compare to measly 2.6% for IPTA)
• Putting an end to PFI as means to build higher education infrastructure. (The UITM campus lease for instance might cost an extra RM200million every year. Not to mention UIA Hospital).
• Be receptive to a student co-payment scheme albeit with automatic access to a robust Income Contingent Loan scheme like Australia. Administered by MoF. Repayment via tax office. 

There is one particular caveat here. The scope of this costing actually broader than what Pakatan  have in mind. I believe they only promising free higher education up to degree level.