Funding 

The Law on Education (Закон України ‘Про освіту’) defines financing education as an investment in human potential, sustainable development of society and the state. The purpose of higher education is to enable individuals to acquire a high level of scientific and/or creative artistic, professional and general competences necessary for activities in a particular speciality or branch of knowledge.

According to the Law on Higher Education (Закон України ‘Про вищу освіту’), state higher education institutions (HEIs) are financed from the state budget on the basis of state order for the training of specialists, scientific and scientific-pedagogical personnel. In addition, funding may come from other sources not prohibited by law. However, all funding must comply with the principles of targeted and efficient use of resources, transparency and accountability in decision-making.

Local self-government bodies may also finance state HEIs under the procedures established by law. The State Budget of Ukraine for the relevant year establishes the amounts allocated for the training of higher education specialists, as well as for scientific and scientific-pedagogical personnel.

Local budgets and other legal sources finance municipal HEIs in accordance with the Budget Code of Ukraine (Бюджетний кодекс України). Private HEIs are financed by their founders and other sources not prohibited by law. HEIs use these funds for statutory activities, following procedures and conditions established by legislation and their statutes.

The income from the main and auxiliary activities of HEIs consists of the following:

• Tuition fees from students enrolled on a contract basis;
• Payments for research performed by the institution on behalf of enterprises and organisations; 
• Income from the sale of goods produced in training and production workshops; 
• Income from the rental of premises, facilities and equipment;
• Subsidies from local budgets;
• Loans and credits from banks;
• Interest earned on deposits of temporarily available extra-budgetary funds;
• Grant agreements, etc.

In 2020-2021, Ukraine implemented and tested a formula-based approach to allocating state funding for higher education (Постанова Кабінету Міністрів України ‘Про розподіл видатків державного бюджету між закладами вищої освіти на основі показників їх освітньої, наукової та міжнародної діяльності’). 

This mechanism guarantees coverage of most basic costs, while distributing the remaining funds based on performance indicators such as: 

• Scale of the institution's activities (estimated number of students enrolled under the state order);
• Positions in international rankings;
• Amount of funds from alternative sources;
• Research activities;
• Regional support;
• Graduate employment rates, etc. 

In the case of the formula approach, the main budgetary authority has the right to set the minimum and maximum level of funding for the HEI. However, Ukraine suspended this approach in March 2022 due to the full-scale Russian invasion. Formula-based allocation is expected to be resumed, with improvements to address wartime constraints (Постанова Кабінету Міністрів України ‘Про внесення змін до постанови Кабінету Міністрів України від 24 грудня 2019 р. № 1146’).

The revised approach will include:

• Indicators of international recognition, regional support, research activity and graduate employment; 
• Funding mechanisms for the training of students at newly established and reorganised institutions;
• Allocation of funds to private HEIs that train students on state orders; 
• Harmonisation with current legislation and adjustments for wartime challenges. 

Through this updated funding model, the state aims to improve the targeting of state order, increase support for subsidised categories of students, increase the flexibility of state grants and ensure the efficient use of budgetary resources.

Financial autonomy and control

The HEIs are fully financially autonomous and operate on the basis of their own statutes. The statute of an HEI defines the procedure for reporting and controlling financial and economic activities.

The head of an HEI manages its financial and economic activities, approves its structure and staffing, ensures the implementation of the financial plan (budget), signs contracts and monitors compliance with financial and organisational discipline in all units. He/she is also responsible for overseeing educational, scientific, research, technical and innovation activities, as well as the results of financial and economic operations, and for the condition and security of the HEI's real estate and other property. The process of implementing these legislative provisions is currently underway. Therefore, during the transitional period, the Resolution of the Cabinet of Ministers of Ukraine ‘On the Approval of the Procedure for the Preparation, Review, Approval and Basic Requirements for the Execution of Estimates of Budgetary Institutions remains in force’ (Постанова Кабінету Міністрів України ‘Про затвердження Порядку складання, розгляду, затвердження та основних вимог до виконання кошторисів бюджетних установ’) remains in force. According to this Resolution, the founders of HEIs must coordinate the staffing plan of state and municipal HEIs.

Ukrainian legislation stipulates that the Academic Council of an HEI approves the financial plan and the annual financial report. The founders of an HEI are primarily responsible for controlling the financial and economic activities of the institution. The Supervisory Board of the HEI, together with student self-government bodies, maintains internal control, among other responsibilities. Citizens' control is exercised by public associations and individuals on the principles of openness and transparency.

The Ministry of Education and Science of Ukraine (MESU) oversees compliance with legislation on education and science, as well as standards of educational activity for HEIs, regardless of their ownership or subordination. As the main spending unit, the MESU also monitors and controls the use of financial resources by HEIs.

State and municipal HEIs are established as budgetary organisations and operate in accordance with the provisions of the Budget Code of Ukraine. This includes relevant financial and budgetary oversight by the State Treasury Service of Ukraine, the State Audit Service and the Accounting Chamber.

The control over the use of budget funds for own revenues of state and municipal HEIs follows the procedure approved by the Cabinet of Ministers of Ukraine (Постанова Кабінету Міністрів України ‘Питання власних надходжень державних і комунальних вищих навчальних закладів, наукових установ та закладів культури’). At all stages of the budgetary process, the authorities monitor compliance with budgetary legislation, conduct audits and assess the effectiveness of budgetary management as required by law.

A key factor in optimising higher education budgeting is achieving a balance between public administration and the financial autonomy of HEIs. This requires transparency in the funding mechanism and accountability.

Fees within public higher education 

State and municipal HEIs may offer paid educational services (Постанова Кабінету Міністрів України ‘Про затвердження переліку платних послуг, які можуть надаватися закладами освіти, іншими установами та закладами системи освіти, що належать до державної і комунальної форми власності’). The cost of these services is based on economically justified expenditure.

HEIs may differentiate tuition fees according to the licensed capacity, the ratio of supply and demand for specific branches of study (specialities) in the national/regional educational services market. If an institution sets differentiated fees, it must adhere to the relevant calculations (Наказ Міністерства освіти і науки України, Міністерства економіки України, Міністерства фінансів України ‘Про затвердження порядків надання платних послуг державними та комунальними навчальними закладами’).

The components of expenditure are: labour costs; payroll charges in accordance with the law; direct costs and payments to other organisations for services; capital expenditure; indexation of salaries; and other expenditures as defined by current legislation.

Students may pay the full tuition fee in advance for the entire period of study or in instalments - monthly, per semester or annually.

An educational institution has the right to change tuition fees (for any unpaid balance) in accordance with the terms of the contract, but not more than once a year and not more than the officially determined inflation rate for the previous calendar year.

The contract is concluded between the educational institution and the student (or their legal representatives) and/or the legal entity or individual making the payment. It specifies the amount and terms of payment for education.

The Vstup.OSVITA.UA information system provides details of tuition fees at all Ukrainian HEIs.

Financial support for learners' families 

Financial support for learners' families includes reimbursement of tuition fees, such as а tax discount of 18% of the tuition fees. This applies to actual expenditures from the previous year.

Financial support for families of students with special educational needs (SEN) is similar to that for other learners at all levels of education and is described in the subchapter Financial support for families of pupils with SEN. The following subchapter, Financial support for learners, provides information on other types of financial support for students' families.

Financial support for learners 

Certain categories of learners in HEIs are eligible for state-targeted support for higher education. This may include full or partial payment of tuition fees from state and local budgets, preferential long-term loans, social scholarships, free textbooks, free internet access and free or reduced-price accommodation in a dormitory. Priority for preferential long-term loans is given to:

• Orphans and children deprived of parental care;
• Children with disabilities;
• Children from low-income or large families;
• Persons and children of persons recognised as combatants and those with war-related disabilities;
• Children whose parent was killed (or disappeared) in the area of hostilities;
• Children living in settlements on the line of contact, etc.

In addition, combatants and their children, as well as persons with disabilities caused by the war, also receive state-targeted support for full-time Bachelor's or Master's degree programmes. This support covers full or partial payment of tuition fees from the state and local budgets.

Upon admission, the state guarantees a share of state-funded places for combatants and their children. In 2023, this share was 10%. 

Graduates of medical and pedagogical HEIs who have signed an agreement to work for at least three years in rural areas or urban-type settlements are entitled to free housing with heating and lighting, within the established standards. Also, such graduates receive one-time targeted financial assistance in the amount and under the conditions specified by law (e.g. (Постанова Кабінету Міністрів України ‘Про надання одноразової адресної грошової допомоги деяким категоріям випускників закладів вищої освіти’, постанова Кабінету Міністрів України ‘Питання оплати праці працівників установ, закладів та організацій окремих галузей бюджетної сфери’).

Full-time students who achieve good grades receive academic scholarships, provided their average grade is at least 7 (on a 12-point scale) or 4 (on a 5-point scale). 

Students also have the opportunity to receive specific named or academic scholarships established by the Cabinet of Ministers of Ukraine.

In addition to academic achievements, students can apply for social scholarships based on specific social circumstances. 

Students are provided with dormitories for the period of study and are entitled to reduced transport fares according to the procedure laid down by the Cabinet of Ministers of Ukraine.

The state guarantees students the right to additional leave from work, reduced working hours and other benefits provided by law for those who combine work and study.

Private education

Private HEIs operate in accordance with the provisions of the following legal frameworks in Ukraine:

• the Civil Code (Цивільний кодекс України), 
• the Commercial Code (Господарський кодекс України), 
• the Tax Code (Податковий кодекс України), 
• the Law on Education (Закон України ‘Про освіту’), 
• the Law on Higher Education (Закон України ‘Про вищу освіту’),
•  Law on Licensing of Economic Activities (Закон України ‘Про ліцензування видів господарської діяльності’),
• and other relevant legislation.

Private schools are established as private organisations (educational institutions) founded by the decision of one or more individuals and/or private legal entities.

As of the beginning of 2023, 116 private HEIs were operating in Ukraine, which is 35% of the total number of HEIs.

Private HEIs are funded by their founders and other legally permitted sources. The main sources of funding for private HEIs include: 

• Tuition fees for educational services;
• State budget funds for the creation of scientific and technical products (if ordered);
• Contributions from enterprises, organisations or individuals under direct contracts for the creation of all types of services at contractual prices;
• Voluntary contributions from enterprises and organisations;
• Bank loans;
• Funds from their own accumulation funds for creating marketable products at an estimated cost, determined independently by the institution;
• Income from the activities of separate structural units or enterprises on the basis of founding agreements;
• Grant agreements for educational and scientific activities.

Private HEIs may receive budget funding if they obtain a state order for the training of specialists in relevant fields.