Funding
Act CCIV of 2011 on the National Higher Education (2011. évi CCIV. törvény a nemzeti felsőoktatásról) (hereinafter: Higher Education Act) adopted by the Parliament on 23 December 2011 significantly transformed the previous system of higher education in several areas, including funding.
According to the Higher Education Act, the state provides support to higher education institutions primarily through maintenance entities and secondarily in a direct way. Subsidies for higher education are included in the state budget in a lump sum. In addition to state funds, the institutions have self-financed student tuition fees, which they receive in full, as well as income from their business activities: the institutions can manage their assets, establish their own business entity, or acquire shares in such organisations.
The financing of the core activities of higher education institutions is regulated by a government decree. According to the decree approved in 2016 (389/2016. (XII. 2.) Korm. rendelet a felsőoktatási intézmények alaptevékenységének finanszírozásáról), the basis of subsidy for students participating in self-financed education is the self-cost determined by the state, the amount of which multiplied by the number of students participating in state scholarship training constitutes the state subsidy provided to the individual institutions.
This amount may differ by +/–10% if students who previously graduated from the institution in certain educational areas found employment in an exceptionally high or low proportion (+/–25%) compared to the national average of the given sector. Employment is measured by the Graduate Career Tracking System, which has been operating for almost a decade. There is no information on how the employment-based allowance correction is implemented in practice, 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 provides other subsidies determined on a normative basis (dormitory subsidy, housing subsidy, textbook subsidy, sports and cultural activity subsidy, scholarship subsidy). Furthermore, it can provide additional funds to some higher education institutions upon application or based on individual agreements.
The financing of the Ludovika University of Public Service is unique: a separate framework for its state support is provided by the Act on the Annual National Budget.
Higher education funding has changed from 1 September 2021, in line with Act CXLVIII of 2020 on the regulation of higher education and amending certain related acts (2020. évi CXLVIII. törvény a felsőoktatás szabályozására vonatkozó és egyes kapcsolódó törvények módosításáról). The principles and rules for the funding of higher education activities are laid down in the framework agreement between the minister responsible for higher education and the maintenance entity, for a period of minimum of 15 and a maximum of 25 years, during which detailed task financing is signed for a period of 6 years. The basis of the subsidy provided has significantly changed, as the previous student-based subsidy is now supplemented by support for scientific, research and artistic activities, as well as by quality and performance-based funding.
Financial autonomy and control
As part of their economic activities, higher education institutions can make all decisions and take measures that contribute to the performance of their tasks defined in their deeds. Accordingly, they can enter into contracts, acquire property, form associations, start an entrepreneurship, establish a business entity, dispose of their property, and use and exploit assets entrusted to them. At the same time, higher education institutions are obliged to use the resources available to them as intended and economically and to protect intellectual and other property.
Since 2014, in state-maintained higher education institutions, the chancellor appointed by the prime minister is responsible for the operation of the institution,. In this capacity, the chancellor has the right to approve or veto economic and financial matters. Since 2015, ‘consistories’ have been operating in state-maintained higher education institutions, to establish the basis for their strategic decisions, and for the support and control of their maintenance activities. Their members are the rector, the chancellor, the determinant organisations in the economic and social environment of the higher education institution, and three other persons appointed by the prime minister based on the recommendation of the higher education institution and the higher education institution's student government.
The budget of state-maintained universities and colleges is approved by their senate with the prior consent of the consistory, taking into account the financial framework announced by their maintenance entity. Their autonomy is limited by the fact that the state-appointed chancellor has the right to approve the economic and financial activities, and the maintenance entity has the right to control the budget.
Tuition fees in sate-maintained higher education institutions
The 2011 Higher Education Act (2011. évi CCIV. törvény a nemzeti felsőoktatásról) created a new student financing system, which distinguishes between three forms:
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support by state scholarship;
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support by a state partial scholarship;
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self-funded education.
When submitting the application for admission, students can decide which form of financing they undertake. Several forms can be indicated on an admission application.
Applicants with the best performance based on their previous studies can achieve a place supported by state scholarship. Those who do not reach the level of performance that would allow them to be included in the state scholarship number, but are only slightly behind, can receive partial scholarship, which means that 50% of their tuition fees are covered by the state.
In a scholarship or partial scholarship programme, students can study for a maximum of two semesters longer than the specified educational period, but for no more than 12 semesters (up to 14 semesters in some programmes).
The condition for state scholarship is that the students (with the exception of those participating in religious education) undertake to work for a Hungarian employer for the same period as the scholarship is awarded, within 20 years of obtaining their diploma. Otherwise, they must repay the valorised value of their scholarship. Employment status also includes paid childcare leave after employment in Hungary, as well as the period of unemployment with job-seeker benefit.
Students participating in a scholarship/partial scholarship programme does not obtain the degree within one and a half times the study period required for the given programme must repay 50% of the total amount of scholarship received.
If a student participating in a (partial) scholarship programme drops out, or continues the studies with self-funding for any reason, his/her place can be taken by a self-funded student studying in the same faculty of the higher education institution if the criteria regarding academic performance are met.
After the July 2022 amendment of the Higher Education Act, the previous regulation – under which a student who did not obtain at least eighteen credits on average in the last two active semesters, or did not reach the minimum average grade required by the organisational and operating regulations of the institution (as specified by Government Decree 87/2015 (IV. 9.) implementing certain provisions of the Act CCIV of 2011 on national higher education (A nemzeti felsőoktatásról szóló 2011. évi CCIV. törvény egyes rendelkezéseinek végrehajtásáról szóló 87/2015. (IV. 9.) Korm. rendelet)), was reclassified to the self-funded form of study – was amended to the effect that the student who did not reach the minimum credits or average grade required by the organisational and operating regulations of the higher education institution, in the last two active semesters, must be reclassified to the self-funded form of study. As a result of the change, the higher education institutions decide on the rules based on which the reclassification takes place.
Every year, the minister defines the number of students who can be admitted to each university faculty with a state scholarship or a state partial scholarship, as well as the admission conditions.
Financial support for students’ families
The current support system is based on the individual support of students in higher education that permits them to study, thereby indirectly helping their families as well. Given that the support system has a uniform basis, the full range of supports is described under the section “Support for students”.
Support for students
Support for students of higher education institutions is regulated by the Higher Education Act (2011. évi CCIV. törvény a nemzeti felsőoktatásról), by the government decree on student fees and subsidies (51/2007. (III. 26.) Korm. rendelet a felsőoktatásban részt vevő hallgatók juttatásairól és az általuk fizetendő egyes térítésekről), and the government decree on doctoral programmes (387/2012. (XII. 19.) Korm. rendelet a doktori iskolákról, a doktori eljárások rendjéről és a habilitációról).
Disadvantaged or disabled students applying for undergraduate and single-cycle studies, and those who are on childcare leave, receive an additional 40 points in addition to the 400 points that can be obtained through their previous academic performance, which can help them to participate in education with a scholarship or partial scholarship.
According to the amendment of Decree 423/2012(XII. 29) (423/2012. (XII. 29.) Kormányrendelet a felsőoktatási felvételi eljárásról) on the procedures of admission to higher education, starting from 2024, after a two-year preparation period, several measures came into force that significantly strengthen the institutional autonomy and the role of universities and colleges in student admission. Certain requirements for applicants that are more favourable than those previously determined could come into effect as early as 2023:
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The upper secondary-school leaving exam remains a general admission requirement, but the general advanced-level secondary-school leaving exam as a mandatory admission requirement ceased in 2023.
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The uniform minimum point thresholds, set by government decree for levels or by ministerial decree for faculties, were also abolished; however, the institutions could also determine them, but can be no higher than before.
As a result of the legislative changes, starting from 2024, after a two-year preparation period, several measures came into force that significantly strengthen the institutional autonomy and the role of universities and colleges in student admission, such as:
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When calculating the upper secondary-school leaving exam points, the percentage results of the intermediate and advanced-level exams will be adjusted: A 100% advanced-level secondary-school leaving exam will be worth 100 points, while a 100% intermediate-level secondary-school leaving exam will be worth 67 points.
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The 500-point admission system remains: 100 points can be given for secondary-school academic results (grades); 100 points for the average of the upper secondary-school leaving exam (200 points); 200 points for the upper secondary-school leaving exam, and the criteria for 100 points are determined by the university. This abolishes the current system of centrally-determined extra points. The extra points for voluntary reserve military service – on top of the 500 points –, of up to 64 points, will remain.
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The uniform minimum point thresholds are abolished; however, the higher education institution can determine the minimum points below which it does not admit anyone.
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The higher education institutions determine whether they require an advanced-level secondary-school leaving exam for admission to some faculties.
Each student can apply for an subsidised student loan (“Student Loan 1”), which can be used freely. To those who undertake to pay the costs during their higher education studies either in the form of a partial scholarship or in the self-funded form, the government provides an additional interest-free student loan (“Student Loan 2”). According to the act, the government can provide scholarship programmes to support students, lecturers and researchers, to increase the quality of education and research. The procedure for awarding them is determined by the government. The higher education institutions must separate the student allowances provided by the government from their state-provided income and their own income. The grants that can be provided to students are regulated by the higher education institution, taking into account the provisions of the government decree.
The institutional allocation of the student support provided by the central budget can be used for scholarships awarded based on academic results; for scholarships awarded based on outstanding professional, academic and public performance exceeding the curriculum requirements; for regular and extraordinary financial social support that can be requested on the basis of the student's social situation; for cash housing support; for textbook allowance; for support for study supplies; and the study costs of an internship.
The state provides students with a student ID card, which gives them travel and shopping discounts. The ID card is obtained through higher education institutions. After two semesters, the Minister responsible for Higher Education awards a National Higher Education Scholarship for one academic year to students who have achieved outstanding academic results in their major, who perform outstanding work in scientific student associations, or who perform outstanding work in their field.
Cross-border students with Hungarian minority background are governed by a government decree. According to this, those studying in Hungary with a Hungarian state scholarship can pursue higher education under the same conditions as Hungarian students.
Non-state-maintained institutions
In addition to higher education institutions maintained by the state, institutions maintained by minority self-governments, ecclesiastical legal entities, and private institutions may operate. Private institutions can be maintained by business associations, foundations, public foundations, religious associations, and public interest trust founds performing a public task. Non-state higher education institutions are entitled to state support based on an agreement with the state.
The principles for financing public interest trust founds performing a public task are laid down in Act IX of 2021 (2021. évi IX. törvény a közfeladatot ellátó közérdekű vagyonkezelő alapítványokról).
The rules for the long-term quality and performance-based funding related to the public tasks in higher education for established churches with an agreement are laid down by Act CXXIV of 1997 on the material conditions for the faith and public-purpose activities of churches (1997. évi CXXIV. törvény az egyházak hitéleti és közcélú tevékenységének anyagi feltételeiről).