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Higher education funding


3.Funding in education

3.2Higher education funding

Last update: 3 February 2024



Objectives, political objectives, educational objectives

A key objective of public funding of higher education is to enable institutions in the tertiary education sector to fulfil their legal obligations and the established educational objectives. Universities, universities of applied sciences and university colleges of teacher education are predominantly publicly financed. Around 8,6% of total expenditure comes from private sources.

The mission of public universities is to promote academic research and teaching as well as the advancement and appreciation of the arts. The purpose of these public-law bodies is to develop skills and qualifications in the scientific and artistic fields. In order to meet the associated organisational, study and personnel law requirements, the universities and their bodies are characterised by the principle of self-administration.

The universities of applied sciences have the task of offering degree courses of study at higher education level, which provide academically founded professional education and training. In addition to practice-oriented research-led teaching, the universities of applied sciences have the task of carrying out applied research and thus contributing to innovation and development in their region.

The university colleges of teacher education have the goal of creating and offering scientifically based degree programmes in teacher education, for teachers at secondary level academic education in cooperation with public universities. Another core task of these higher education institutions is continuing education and training of teachers as well as research and development, and school development.

It is to mention that for the fourth higher education sector in Austria, which is private universities, no public funding is provided. 

The roles of various bodies in public funding

The 22 public universities are essentially funded by the federal government, with the exception of the University for Continuing Education Krems. When planning the funding, the financial capabilities of the federal government, the requirements placed on the universities and the fulfilment of the tasks by the universities must be taken into account. The University for Continuing Education Krems is financed by course fees, by federal funds (personnel, material and investment costs) and by the province of Lower Austria (property including facilities and premises).

Public universities account for the bulk of public funding in the tertiary sector. Furthermore, the federal government has always sought to increase the university budget in recent years. Thus, from 2019 to 2021, a total of EUR 11 billion was available for public universities, 1.3 billion euros more than in the previous three-year period.

Overall, public universities spent around EUR 4.7 billion in 2020. The universities received almost EUR 3.7 billion of this expenditure from the federal government as part of the global budget. The remaining expenditure comes from other state and private sources (e.g. research grants, other third-party funding and tuition fees) as well as fees for continuing education courses at universities and other university revenues.

The universities of applied sciences are mainly funded by the federal government (with the exception of infrastructure) and by other public bodies or also (to a lesser extent) by legal entities under private law. Within the framework of the co-financing by the provinces and municipalities, they are able to influence the design of degree programmes at universities of applied sciences. The exact proportions of funding of, for example, municipalities, provinces or the economy are basically unknown, however, because the universities of applied sciences are organised under private law. According to the University of Applied Sciences Development and Financing Plan 2018/19 - 2022/23 (last accessed 13/10/2022), around EUR 320 million (2018) to EUR 347 million (2023) federal funds are earmarked for this period of validity.

Total public spending at universities of applied sciences in 2020 amounted to around EUR 453million, of which around EUR 328 million was financed by the federal government and the rest by the provinces.

University colleges of teacher education are divided into public and private institutions. The nine public university colleges of teacher education are administered and financed by the federal government. The five private university colleges of teacher education are run by foundations established – with one exception – by the Catholic Church. In addition, there are three recognised providers of private study programmes run by religious organisations for the training of religion teachers at compulsory schools. At private university colleges of teacher education, the federal government funds the entire costs of the teaching staff and thus the majority of expenditure. In 2020, the total public expenditure at university colleges of teacher education amounted to EUR 212 million. 

Forms of public funding

Public universities

A new model for financing public universities has been in force since February 2018. This new funding model was implemented for the first time in the performance agreements between the federal government and the individual universities for the period 2019-2021. Within the framework of the new university funding scheme, the universities still receive a global budget for the three-year period of the performance agreement. Universities are free to use the resources of their global budgets within the framework of their tasks and in accordance with the performance agreement.

Now the global budget of each university consists of three budget pillars (‘three-pillar model’):

  1. Partial amount for teaching
  2. Partial amount for research and the advancement and appreciation of the arts
  3. Partial amount for infrastructure and strategic development

The calculation of the partial amounts for the first two areas is based on specific indicators and seven weighted subject groups: the number of students who take a certain number of examinations in the sub-area teaching (at least 16 ECTS per academic year) and the number of scientific/artistic personnel in the sub-area research/advancement and appreciation of the arts. A small proportion is allocated as part of competition indicators (graduations, study programmes with more than 40 ECTS per academic year, third-party funding raised and doctoral programmes). The partial amount for infrastructure and strategic development comprises amounts for the buildings used by the universities, the additional clinical expenditure but also direct financial incentives for teaching and research. For the performance agreement period 2019-2021, the university budget was increased by a total of EUR 1.3 billion to around EUR 11 billion. In the period from 2022 to 2024, the university budget increases by EUR 1.95 billion to EUR 12.95 billion.

The University for Continuing Education Krems is financed on the one hand by cost-covering course fees and on the other hand by federal grants for personnel, material and investment expenses. Under an agreement with the federal government, the province of Lower Austria is obliged to provide, construct and maintain the property, buildings and facilities. The remaining funding for this university comes from third-party funds. 

Universities of applied sciences

Universities of applied sciences are financed according to a mixed standard cost system. The federal government finances universities of applied sciences by allocating flat-rate contributions per study place and, in this way, covers about 90 percent of the annual standard costs of the study places (by means of funding egreements). According to the standard cost model, the federal share of a study place is EUR 6,970 for business-related study programmes and EUR 8,850 for technical study programmes. The remaining costs, such as building and investment costs, are borne by the provider (e.g. provincial governments, regional and supra-regional authorities) of the respective universitiy of applied sciences. Revenue from third-party funding represents a smaller proportion of the available resources. In addition, the providers are entitled to collect tuition fees from degree programme students amounting to EUR 363.63 per semester. 

University colleges of teacher education

The funding of university colleges of teacher education is negotiated between the respective rectorate and the Federal Ministry of Education, Science and Research. In the course of this, the rectorate must draw up an annual target and performance plan including a resource plan for three years in each case and submit it to the university council for a decision. Furthermore, the "Universities of Teacher Education - Development Plan" (PH-EP) defines the positioning of the universities of teacher education as a higher education sector in the Austrian system of comprehensive universities as well as its quality-oriented development 2021 to 2026. 

Financial autonomy and control

Financial autonomy

Universities are legal entities under public law and perform their duties without instructions. They are entitled to form societies, foundations and associations as well as to participate in societies and to be members of associations. In addition, other assets can be acquired, e.g. in the form of donations, gifts and sponsoring, and grants can be received from other legal entities. Universities act autonomously in the acquisition and use of third-party funds within the framework of scientific and artistic research projects and findings.

In principle, universities can use the funds of their global budgets as they see fit within the limits of their tasks and the performance agreements. Exceptions are legal restrictions or earmarking funds for a specific purpose. For example, they are limited in their autonomy with regard to civil servants. (This last sentence of course touches the issue of staffing autonomy.)

Within the framework of the Ordinance on Universities Real Estate (Universitäten-Immobilienverordnung, UniImmo VO), universities are largely autonomous in terms of premises and infrastructure; they act in their own name and on their own account. If the university council gives its approval, it is possible for universities to create liabilities in excess of their business activities. However, they must obtain the approval of the BMBWF before entering into liabilities or taking out loans above an amount limit of EUR 10 million. Examining the financial management of the universities as well as of the legal entities established by them and such legal entities in which the universities directly or indirectly hold a stake of more than 50% is the responsibility of the Court of Audit as an independent auditing body.

In the case of universities of applied sciences, the entire financial responsibility lies with the provider. Universities of applied sciences therefore have complete autonomy over their public funding vis-à-vis the federal government.

In contrast to universities and universities of applied sciences, university colleges of teacher education have only limited legal capacity. They are therefore closely linked to the requirements of the federal government, which is the employer of the staff, particularly in matters of financing. The ecclesiastical university colleges of teacher education have greater autonomy. Although they must meet the legal requirements for university colleges of teacher education as a minimum requirement, apart from this they are autonomous. 


The financial management of public universities shall be based on the principles of legality, profitability, expediency, economy and transparency. Under the responsibility and direction of the rectorate, each public university must install an accounting and reporting system, and here the accounting system is subject to the provisions of company law. The rectorate shall subsequently submit the statement of account thus drawn up to the university council as a supervisory body for approval. The university council shall consist of five, seven or nine members who do not belong to the university, are elected for a period of five years and who shall be past or present holders of responsible positions, especially in academic, cultural or business life, and whose exceptional knowledge and experience are such as to enable them to contribute to the attainment of the objectives and the fulfilment of the tasks of the university. Re-election up to a total term of 10 years is possible. In addition, universities are subject to the investment and financial controlling (Sec. 67 Federal Organic Budget Act 2013) of the  Federal Ministry of Finance.

The Agency for Quality Assurance and Accreditation Austria (AQ Austria) is the central body responsible for deciding on the accreditation of universities of applied sciences degree programmes and on the withdrawal of this accreditation. Accreditation is a prerequisite for a funding agreement between the federal ministry and the respective provider of the degree programmes. The funding agreements are limited to five years. The extension of these funding agreements is subject to a monitoring by the ministry, which primarily takes into account the development of student entrants and the employability of graduates.

At university colleges of teacher education, cost and performance accounting must be established under the responsibility and direction of the rectorate. The Court of Audit is responsible for the final control of the financial management of university colleges of teacher education. 

Fees within public higher education

In principle, most students at public universities do not have to pay tuition fees. This applies to Austrian students as well as students from an EU or EEA state or from legally equivalent states if they are within the planned period of study plus two extra semesters. For each semester beyond that, EUR 363.36 will be charged. Students with health or physical impairments, students with care responsibilities for small children and students in an international mobility programme are exempted from this requirement.

Students from third countries outside the EU or EEA have to pay fees amounting to EUR 726.72. Nationals from so-called ‘least developed countries’ according to the ‘DAC List of ODA Recipients’ are exempted from tuition fees. The tuition fees paid are collected by the universities and made available to them.

The fee for compulsory membership in the Austrian Students’ Union as a representation of interests is to be paid by all students in the amount of EUR 21.20 (Students’ Union fee incl. insurance).

In contrast to the other public universities, all courses offered at the University for Continuing Education Krems are subject to a fee, and here tuition fees of around EUR 10,000 or more are charged for a master’s degree.

Unlike public universities, the providers of universities of applied sciences can decide for themselves whether to collect tuition fees or not. Degree programme students may be charged a maximum tuition fee of EUR 363.36 per semester. The providers of four universities of applied sciences currently choose not to charge tuition fees. All students have to pay the Students’ Union fee.

At present, as at most public universities, no tuition fees are charged at university colleges of teacher education as long as the students are citizens of an EU Member State or of a legally equivalent state and they have not exceeded the planned period of study by more than two extra semester. All other students have to pay a tuition fee of EUR 363.36 each semester in advance. The tuition fees can be earmarked as the university colleges of teacher education choose. 

Financial support for learners' families

It is possible to apply for indirect grants for financial support for families. This includes funds that can be used by the parents of the students. The most important indirect study support measures are family allowances, health and accident insurance, tax benefits and social support from the Austrian Students’ Union. The legal obligation of parents to provide support for their children until they become self-sufficient forms the basis of entitlement for such study grants. 

Family allowance

As a rule, parents receive a monthly allowance of EUR 165.10 for their student children between the ages of 19 and 24. Depending on the number of children, the total amount of family allowance may increase. Families with severely disabled children receive a further supplement of EUR 155.90 per month. In order to not lose the entitlement to a family allowance, students must provide proof of successful continuation of their studies. In the first year of study, proof of completion of eight semester hours per week/16 ECTS credits or of a partial examination in the case of the first diploma examination must be submitted for this purpose. 

Health and accident insurance

With regard to health insurance, students have the option of being co-insured as a relative with their parents or spouse. This benefit is linked to proof of success in the study programme and can only be claimed up to the age of 27. Students who are neither co-insured with their parents, spouse or life partner, nor are compulsorily insured due to their own professional activity, have the option of preferential self-insurance within the framework of health insurance at a cost of EUR 64,78 per month (2022). Under the terms of the Students Support Act (Studienförderungsgesetz), students who take out preferential self-insurance may not, however, have an annual income of more than EUR 15,000. In addition, a maximum of two changes of study are permitted and the planned period of study may not be exceeded by more than four semesters. Furthermore, students at universities and other higher education institutions are partially insured for accident insurance. Specifically, the damage arising from accidents that are connected with the university location, the time of studies and which are caused by university education is covered. 

Tax benefits

Taxpayers who claim a family allowance are entitled to a child tax credit, which is paid monthly together with the family allowance and amounts to EUR 58.40 per child. In addition, it is possible to claim exceptional costs for students who receive a family allowance and study outside their place of residence.  Parents are entitled to the Family Bonus Plus as a tax deduction after the child’s 18th birthday (up to a maximum of the 24th birthday) at an amount of EUR 650 per year if a family allowance is still received for this child. 

Social support by the students' union

In cooperation with the Students’ Union, students in need of social support can also receive financial assistance in the form of financial support for childcare and housing costs, financial support for psychotherapy as well as for mediation in maintenance disputes between students and parents. The Students’ Union receives around EUR 135.0000 in subsidies from the federal government each year for this purpose.

The Corona Hardship Fund was created by the Department for Social Policy of the Austrian Student Union at the beginning of the COVID-19 pandemic in order to support students financially during this crisis. Students in particular fall through many of the state’s safety nets for financial support during this crisis, as students often are not able to satisfy the prerequisites for government assistance. The fund aims at counteracting this failure and ensuring financial support for students. It has already provided financial support to over 1.000 students across Austria. 

Grants for dining halls

As a rule, cafeterias and canteens at universities are run by an operating company, Österreichische Mensenbetriebsgesellschaft m.b.H.. This company has been 100% owned by the federal government since 1997. According to the statutes, the purpose of the company is to provide inexpensive meals for university members in accordance with the principle of cost recovery. The federal government provides subsidies to the Students’ Union to help cover the meal prices for students in need of social support. 

Financial support for learners

Direct study support measures in the form of transfer payments provide financial support for students. The group of beneficiaries includes Austrian citizens and equivalent foreigners as well as stateless persons. In principle, degree programme students at public universities, universities of applied sciences and university colleges of teacher education may apply for grants in accordance with the Students Support Act (Studienförderungsgesetz).

Direct study support measures include, for instance, the study grant, insurance contributions, study allowances and grants for studies abroad. In addition, commuting allowances, scholarships for graduates, travel grants, language scholarships, mobility grants, merit scholarships, needs-based grants, study support, the achievement prize and the Award of Excellence may be awarded. 

Study grants

Students who are in need of social support, who have not yet completed a study programme or other equivalent education or training programme, who can prove study success and who began this study programme before they reached the age of 33  (in exceptional cases 38) can apply for a study grant. The maximum study grant can reach EUR 923 per month for students aged 27 and more. When calculating the study grant, the reasonable maintenance payments made by parents and the students’ own contributions are credited towards the amount of the study grant. The annual additional income limit for students is EUR 15,000. The entitlement to study grants therefore depends mainly on the social eligibility for support and study success.

From the age of 27, recipients of study grants are also entitled to a monthly insurance contribution of EUR 19 (EUR 228 per year) as part of the self-insurance in health insurance. This amount is paid out regularly by the study grant authority at the end of each semester.

In addition, all students who receive a study grant and have to pay tuition fees are entitled to a study allowance at the amount of the general tuition fee of EUR 363.63 per semester.

A special "anti-inflationary package for students" has been put together as a response to the wave of inflation. In August 2022, all recipients of study grants receive an additional EUR 300 as an immediate measure against inflation. Furthermore, as of September 2022, the student grant will be increased by up to 12 percent, and in one year's time it will also be increased annually (Source: Federal Ministry of Education, Science and Research (Bundesministerium für Bildung, Wissenschaft und Forschung), anti-inflationary package for students (last accessed 26/09/2022). 

Grant for studies abroad

Grants for studies abroad are intended to enable international mobility for recipients of study grants. This grant is paid in addition to the (Austrian) study grant. To be eligible for this grant, enrolment at least for the third semester, the equivalence of the study programme at the foreign university and a minimum period of stay of one month (max. funding for 20 months) are required. The amount of the grant varies from country to country because the amount is determined on the basis of the respective living and study costs of the countries of study and is a maximum of EUR 630.

Travel grants help to cover the travel expenses of recipients of study grants during their subsidised studies abroad.  In addition, there are grants for language courses to prepare students for studying abroad. 

Mobility grants

Mobility grants serve to support students in study programmes which are held entirely at recognised higher education institutions outside Austria in countries of the European Economic Area, in Switzerland or in the United Kingdom of Great Britain and Northern Ireland. 

Sholarships fo graduates

Students in the final stage of their studies have the opportunity to apply for a scholarship for graduates of a maximum of EUR 1,200 per month for up to eighteen months. These scholarships are granted by the study grant authority. 

Merit scholarships

Merit scholarships can be awarded to students at universities and universities of applied sciences who have achieved outstanding academic results. The amount of the merit scholarship is a minimum of EUR 750 and a maximum of EUR 1,500 per academic year, but there is no legal entitlement. 

Needs-based grants

Needs-based grants are awarded to students at universities and universities of applied sciences if they are required in order to produce costly scientific or artistic work with above-average academic success and if an expert report is presented by the university. The amount of the needs-based grant is a minimum of EUR 750 and a maximum of EUR 3,600 per academic year, but there is no legal entitlement.

Study support

Students and graduates can receive study support to compensate for social hardship or particularly difficult study conditions, for example in the form of cost subsidies or non-cash benefits. There is no legal entitlement to study support. 

Achievement prize and award of excellence

The best 50 graduates of diploma, master’s and doctoral programmes receive an achievement prize for outstanding achievements. In addition, the Award of Excellence for outstanding dissertations has been awarded since 2008. The prize money for the achievement prize and the Award of Excellence is EUR 3,000 in each case. 

Private education

The Private Higher Education Act (Privathochschulgesetz) regulates the establishment of private higher education, which are recognised by the state through accreditation in accordance with the provisions of the Act on Quality Assurance in Higher Education (Hochschul-Qualitätssicherungsgesetz). There are currently 18 educational institutions recognised as private HEIs. The relationship between students and private HEIs is governed by private law.

Private HEIs are financed from various sources (including tuition fees, grants and contributions from the providers of the private HEIs, third-party funds, donations, etc.).

In contrast to public universities, private HEIs may not be granted any payments in kind from the federal government. Excluded in this context are compensatory payments from contracts for the provision of certain teaching and research services by a private HEI, which the federal government concludes with a private HEI if required to supplement the range of courses offered by public universities, as well as payments in kind from the federal government within the framework of publicly advertised research, technology, development and innovation programmes. However, federal provinces or municipalities are free to finance private HEIs.

Private HEIs are responsible for determining access regulations and the amount of tuition fees. The amount of tuition fees varies depending on the private HEI and can be up to EUR 14,000 per semester.

Students at private HEIs have the same entitlement to study support as students at public universities, provided they fulfil the necessary requirements.