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Higher education funding

Hungary

3.Funding in education

3.2Higher education funding

Last update: 27 November 2023

Funding

The Act CCIV 2011 on Higher Education, adopted by the Parliament on 23rd December, 2011, significantly transformed the previous system of higher education in several respects, including its funding.

According to the Act on Higher Education, the state provides support to higher education institutions primarily through maintainers, and secondarily directly to Higher Education Institutions. Funds for higher education are included in the annual national budget in a single amount. In addition to public funds, the institutions have full access to the tuition fees paid by their self-financing students and to the income from their economic activities; institutions may manage their assets, set up their own businesses or acquire shares in organisations.

The financing of the basic activities of higher education institutions is regulated by a government decree. According to a decree adopted in 2016, the support is based on tuition fees set by the state for students participating in self-financed programmes, the amount of which, multiplied by the number of students in state-subsidised programmes, constitutes the State subsidy paid to each institution.

This amount may differ by + - 10%, if an extremely high or low proportion (+ - 25%) compared to the national average, of the former graduates of the institution have found employment in their respective field of study. Employment is measured by a graduate career monitoring system that has been in place for almost a decade. There is no information on the practice of employment-based support adjustment, but given the labour market trends in Hungary, it is unlikely that a significant number of cases would have occurred in either direction.   

The state also offers other subsidies determined on a normative basis (subsidy for students’ dormitories, accommodation, textbooks, sport and cultural activities, and scholarships). Furthermore, additional support may be provided to HEIs based on either applications for support, or on individual agreements.

The funding of the University of Public Service differs from the general regulations: a separate budget is earmarked in the Act on the Annual National Budget.

The financing of higher education was amended as of 1 September 2021 pursuant to Act CXLVIII of 2020 on the regulation of higher education and the amendment is certain related acts. The basic principles for the support of higher education are set out in a framework agreement between the Minister responsible for higher education and the maintainer for a period of a minimum of 15 years and a maximum of 25 years; for the duration of which a detailed task financing agreement will be concluded for periods of 6 years. The basis of the support provided was significantly modified, as the previous student-based support is supplemented with the support of scientific research and artistic creative activities, as well as by support based on quality and performance funding.

Financial autonomy and control

Within the scope of their economic activities, higher education institutions may take any decision or measure that contributes to the execution of the tasks specified in their statutes. Thus, in particular, they may conclude contracts, acquire properties, join partnerships, undertake business activities, establish a business organisation, sell or mortgage their properties, and use and utilise the assets provided to them. However, HEIs must be committed to the proper and efficient use of funds at their disposal and the protection of intellectual and other properties.

Since 2014, public HEIs have been operated by a Chancellor, who is appointed by the Prime Minister and is responsible for the operation of the institution. In this function, regarding economic and financial issues, the Chancellor has the right of consent, i.e. the right of veto. Since 2015 in public HEIs a body called consistory has been operated to provide a basis for strategic decisions, as well as professional support and control of the economic activities of the institutions. It consists of the following members: The Rector, the Chancellor, as well as the stakeholders of the economic-social context of the HEI, as well as three additional people appointed by the Minister based on the recommendations of the concerned HEI and the Students’ Union of the HEI.

The budgets of public universities and colleges are approved by their Senate with the prior consent of the Consistory, taking into account the financial framework reported by the maintainer. Their autonomy is limited by the fact that the chancellor appointed by the state has the right of consent in economic and financial matters, and the maintainer has the right to control the budget.

Fees within Public Higher Education

The Higher Education Act of 2011 created a new student funding scheme, which distinguishes three categories:

- places financed through a state scholarship,

places financed partially through a state scholarship and

- places requiring full tuition fee.

When submitting their applications, students may decide on their preferred form of funding. Several forms may be indicated in one application for admission.

Applicants with the best performance in their previous studies may receive state scholarship. Those who do not reach the level of performance at which they can receive state scholarship, but only slightly lag behind this level, can study with partial-scholarship funding, which means that 50% of their tuition fees are covered by the state.

Students receiving state scholarship or partial state scholarship can take a maximum of two terms longer to finish their studies than the determined training period, but for a maximum of 12 terms (or 14 in some special training).

The condition of the state scholarship is that the students receiving it (excluding those participating in religious studies) undertake to work for a Hungarian employer for the same period as the duration of the payment of the scholarship within twenty years of obtaining their diploma. Otherwise, they will have to repay the valorised value of their scholarship. The employment relationship also includes the period of paid parental leave paid based on previous employment in Hungary and the period of unemployment with job-search allowance.

If a student in a scholarship / partial scholarship programme does not obtain a degree during one and a half times the study period required for the given training, he / she must repay 50% of his / her scholarship.

If students participating in an institution in a (partial) scholarship programme discontinue their studies, or a student continues his / her studies in the form of self-financing for any reason, other students formerly participating in self-financed programmes may take their places upon request, if his / her academic performance entitles him / her to do so.

Due to the difficulties of the COVID pandemic, the government decided by Government Decree 531/2021 (IX. 14.) that students cannot be reclassified from state scholarship places to places requiring full tuition fee based on their weighted average study results. Students may be reclassified to a self-financing form if they have completed all the semesters of their studies financed by a state scholarship.

The number of students admissible to the different state scholarship and partial state scholarship programmes, as well as the conditions for admission are regulated annually by the minster.

Financial support for learners’ families

The current support system is based on individual support for students in higher education to enable them to study, thus indirectly helping their families. With respect to the fact that the support scheme is built on a uniform basis, refer to point “Fees within Public Education” for the overall scheme.

Financial support to learners

Support provided for students of HEIs is regulated by the Act on Higher Education, the government decree on student allowances and support, as well as by the government decree on the doctoral programmes.

Disadvantaged or disabled students, as well as those on a maternity leave applying for admission to a bachelor programme or undivided training receive an additional 40 points added to the 400 points obtainable for their prior academic achievements, which may help them to receive a scholarship or partial scholarship.

An interest-subsidised student loan (“Diákhitel 1”) is available to all students and is a free-use loan. For those who undertake to cover the costs of their higher education studies, either in the form of part-scholarships or in a fully self-financed programme, the government provides additional interest-free student loans (“Diákhitel 2”). One-time assistance during higher education is provided by „Student Loan Plus” (Diákhitel Plusz), which is a free-use interest-free student loan. In the case of structural change programme with certain providers - java backend developer, frontend development, tester and system operator – students can apply for interest-free, free-use support (“Diákhitel Pluszt struktúraváltó képzésben”)

According to the law, the Government may establish scholarships to support students, lecturers, and researchers to improve the quality of education and research. The rules for its award are determined by the Government. Student support provided by the Government must be handled separately by higher education institutions from their state support and their own revenues. Grants that can be provided to students are regulated by the higher education institution, taking into account the provisions of the government decree.

Grants provided by the annual national budget can be used by the institutions for: scholarships provided on the basis of academic results, scholarships awarded on the basis of outstanding professional and scientific performance and engagement in public life in addition to meeting the curriculum requirements, regular and one-off social assistance in cash based on the student's social needs, grants for housing, textbooks and school aid, and the costs of an internship.

Students are provided a student ID card by the state that entitles them for discounts when travelling and purchasing certain goods. Students receive the above ID through the HEIs. After finishing two terms, for the period of an academic year, the Minister for Education may grant a scholarship to students who have achieved outstanding results in their programmes or in a Scientific Students’ Association, or in their professional field.

The studies of foreign students in Hungary are regulated by a government decree. According to this, students studying in Hungary with a Hungarian state scholarship may pursue their higher educational studies under the same conditions as Hungarian students.

Private Education

In addition to the state, national self-governments, religious legal entities and private institutions may also maintain higher education institutions. Private institutions may be maintained by companies, foundations, public foundations, religious associations and public interest trust funds. Non-state higher education institutions are eligible for state support based on an agreement with the state.The principles for the financing of public trust funds performing public functions are laid down in Act IX of 2021.