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Higher Education Funding


3.Funding in Education

3.2Higher Education Funding

Last update: 24 June 2022


Academies of Professional Higher Eduation, specialised colleges and University Colleges as well as universities are all state funded self-governing institutions.

The self-governing educational institutions have two sources of revenue for financing their educational programmes: state grants and their own income from income-generating activities in form of participant fees and fees paid for unemployed people in activation programmes, etc. State grants amount to approximately 80 per cent of the total funding and are thus the primary source of revenue for the institutions.

The grants are given as block grants, which the institutions are free to use as they see fit within the frameworks of the applicable appropriation pre-conditions and rules of disposal and in accordance with the objectives that have been determined for the individual educational programmes and institutions.

State grants

The taximeter system

The taximeter system is the primary appropriation model for distributing state funding, but it is also necessary to supplement the taximeter management with a number of supplementary management tools in the form of basic grants, targeted research and development funds, multi-year agreement models, etc. in order to ensure that the collective financial management is flexible enough to meet various political, administrative and institutional needs. The national financial management must therefore both meet the demand for the efficient distribution of funds and, at the same time, support the educational political objectives regarding, among other things, the geographical availability of educational programmes and the development of special areas of initiative, which requires a variety of management tools.

Taximeter management basically entails that within the state’s total financial framework for educational purposes, which is determined by a range of overall political expense priorities, activity-level dependent appropriations are distributed to the individual educational institutions based on: 

  • Objective goals for activity levels and
  • Politically determined taximeter rates per activity-level units.

The taximeter is triggered by the number of earned student full-time equivalents for ordinary students, PhD students, participants in continuing training courses and in the open education programmes offered by the institutions (for which the users in most cases pay a modest fee). The number of earned student full-time equivalents is multiplied by taximeters laid down in the annual government budget, and the grant for educational purposes is laid down on the basis of this.

Basic grants

In all areas, the taximeter system is combined with a basic grant designed to finance the basic expenses of the institution. At present there are two different basic grant models:

  • An activity-level independent basic grant, which is budgeted as a unit grant.
  • An activity-dependent basic grant, which is intended to provide support for the institutional structure.

The basic grant, particularly in the activity-level independent form, causes a redistribution to take place to the benefit of smaller institutions as compensation for their relatively higher unit costs. The grant can therefore have a relatively large financial importance for these institutions and assists in ensuring their continued activities. The basic grants thus also have a regional, political dimension because many smaller institutions are situated in geographical outlying areas, and the basic grant is thus a flexible way of supporting the regional spread of educational opportunities.

Funds for needy institutions

In the relevant legislation there is a legal basis for awarding loans or grants to self-governing institutions that are in a particularly difficult situation. The primary rule is that the relevant ministries provides aid in the form of interest earning loans that are to be repaid in instalments over a period of no longer than five years to institutions that are experiencing acute liquidity difficulties. Providing these loans is conditional on the institution following the ministries' requirements for restructuring activities with the aim of re-establishing a sound financial foundation. The institution is placed under strict economic supervision and must normally send quarterly reports on development to the ministries.

Mergers as a management tool

A selected few educational institutions are so small that they will have a difficult time maintaining a sustainable financial situation. These institutions usually only offer one type of educational programme and are, therefore, vulnerable to even the slightest deviation in the number of students. In such situations, the ministries can recommend that these institution look for possibilities for merging with another and financially more sustainable institution. In certain instances the ministries have even made such a merger with a better-grounded institution a requirement of providing funds for needy institutions. The ministries follow up on making sure that the institution realises the financial and administrative perspectives that were the basis of the govenmental approval of the merger.

Non-activity level dependent grants

Apart from the basic grants, a number of objective-defined, or 'earmarked' grants are also provided such as, for example, multi-year agreement models and pool allocations in the form of, among other things, research and development funds.

These types of grants reflect the fact that the taximeter system primarily supports existing educational programmes. Therefore, a number of funding models have been developed to supplement the taximeter system. These models are designed to provide support for the quality development of the programmes and to take into consideration the need to be able to promote politically prioritised initiative areas.

Income-generating activities

The legislation concerning institutions allows for the possibility of the institutions performing income-generating activities in open competition with private sector enterprises. The intention is partly to ensure flexible and efficient utilisation of capacities and resources and partly to take advantage of the academic synergy-effects and opportunities for competency development. The surplus from these income-generating activities can be used for financing new needs, for example in relation to the development of new educational programmes.

The institutions are subject to conditions for carrying out income-generating activities, which means that:

  • The income-generating activities must be a natural extension of the regular activities of the institution.
  • The institution must be able to separate the production of goods and services that are intended to generate income from the institution’s other tasks.
  • The surplus or loss in one financial year can be carried over to a later financial year.
  • The accumulative result of the income-generating activities may not be negative for four years in a row.

Apart from this, there are rules governing the pricing of goods and services that are provided as income-generating activities. As a general rule, the pricing must be such that it does not compromise the competitiveness of private or public competitors and such that the long-term average costs are covered. In accordance with the legislation applicable to institutions, it is made additionally clear that institutions that practice income-generating activities must follow good marketing practices and must not impose unfair price competition on others.

Financial autonomy and control

The Danish Building & Property Agency functions as the owner of the Danish state’s education and research buildings and sublets them to the universities.

Fees within public higher education

Tuition at Danish public and most private educational institutions is free for Danish students and for EU/EEA students as well as for students participating in an exhange programme. From 2006, students from outside EU/EEA have to pay a tuition fee for full educational progarmmes. Tution fees can vary depending on the course. Annual tuition fee range from 6,000 to 16,000 Euro. A number of scholarships and grants are available from the institutions and from public funded schemes

Tution fees are paid directly to the university by the students, and the university does not receive any taximeter rate from the state from these students.

For more information: Study in Denmark

Financial support for learners' families

There is no financial support for learners' families at this level.

Financial support for learners

Danish students are entitled to public support for his or her further education - regardless of social standing. Students are eligible for financial help to cover living costs for a great variety of courses and studies. Support for students' living costs is awarded by the State Educational Grant and Loan Scheme (SU), a system managed by the Danish Agency for Higher Education in collaboration with the educational institutions and under the auspices of the Danish Ministry Higher Education and Science.

For more information: SU - The Danish students' Grants and Loans Scheme

Private education

There are no private institutions at this level.


Bekendtgørelse af lov om universiteter (universitetsloven), [Consolidation Act on universities], LBK nr 960 af 14/08/2014.