Financial resources of state higher education institutions are funds from the basic state budget and income from other sources. Higher education institutions use this income according to the regulations on non-profit organizations. A higher education institution has the right to accept and use donations and grants from banks, other credit organizations, grants and donations from legal entities, as well as individuals. The Senate of the higher education institution determines the structure of the financial resources of the higher education institution but the Audit commission controls the execution of its budget. Once a year the Rector informs the Senate, the Minister of Education and Science and the Minister of the respective field or the founder of the respective institution about the use of the budget.
Higher education institutions founded by the state receives the following funding:
- from the state education budget - basic financing for the optimum number of lists of study programmes and the number of students covering resources to pay for public utilities, taxes, infrastructure maintenance, purchase of equipment and inventory, research and artistic creativity as well as salaries for the staff;
- from tuition fees, paid by the state or received as repayable or free loans which either have to be paid back or need not to be paid back according to the regulations of the Cabinet of Ministers on financing studies;
- from financing intended for use on specific goals.
In 2015 the three-pillar financing model for higher education was introduced in Latvia. It is designed to improve higher education funding system. It comprises:
- base funding for ensuring of study processes,
- performance-based funding, and
- development funding.
The Ministry of Education and Science starts to implement performance-based funding for higher education according to the Government’s approved concept on the New Higher Education Funding Model Implementation in Latvia.
Financial autonomy and control
A higher educational institution is autonomous in regard to organizational procedure, implementation of the educational process, internal rules and regulations, hiring and discharge of educational and technical personnel and distribution of allocated funding.
Fees within public higher education
In Latvia higher education may be acquired for state budget resources or for individual payment. The number of places in study programmes subsidized by the state is decided every year at central level by the Ministry of Education and Science. In the last years, in accordance with the demands of labour market and priorities defined in the long-term strategy of economy of Latvia, the number of places subsidized by the state has been increased in areas of natural sciences, mathematics and engineering.
Registration fee is stipulated by all higher education institutions, its amount depends on the institution and it is approx EUR 20 (extra payment may be required if a person submits documents for several programmes).
Tuition fees are charged to students who pass the entrance examinations or regular examinations but fail to be admitted to state-financed places. Institutions are free to set tuition fees for the other places. The size of tuition fees varies quite considerably from one institution or study programme to other. Satistical data on fees and support in public HE is available in the Eurydice publication “National Student Fee and Support System”.
However, in accordance with the Regulations on Compulsory Provisions to be Included in the Study Agreement the fee for the programme in total has to be specified in the agreement thus preventing the possible increase of the fee during studies. Payment has to be made to the corresponding higher education institution.
It is planned to develop a unified graduate register gathering the information available in databases of Education Ministry, State Revenue Service, State Employment Agency and State Social Insurance Agency. Thus, statistical data will be available on graduates and their employment and salary level. It will be clear if they work in respective field of their acquired higher education and the data will reflect weather their salary differs from employees with vocational education in the same field. This register will provide with the necessary information determining the number of state priority study fields and budget places allocated annually, as well as help pupils understand which qualifications are required in the labor market.
Higher education institutions implement the so-called rotation principle. Rotation is a possibility to transfer from a tuition fee paid place to a study place financed from the state budget, and is held as annual competition. Usually students with higher marks get the right to study in a state-financed place. Each institution develops its own regulations concerning rotation.
Financial support for learners' families
Tax benefits are awarded to parents (payers of personal income tax) of EUR 213,43 per year to recover the part of the annual funds invested in health care and education of their children.
Financial support for learners
Students are provided financial support in the form of scholarships, grants and loans as well as indirectly by discount of travelling costs in public transport.Due to economical situation from academic year 2009/2010 students are conferred scholarships considering not only their marks but social security as well.
Loans may be received by students who study in the institutions offering accredited higher education programmes. These are paid by banks while the state guarantees these loans. The total amount of money devoted for loans is set in the state budget and the bank allocating loans is chosen annually via auction. In order to receive a loan a warrantor is demanded. Since 2009 warrantors can be persons who receive study or student loans themselves or persons who receive or repay these or other loans as long as his/her incomes are adequate – monthly loan repayments should not exceed 40% of monthly income. New arrangements foresee an opportunity to warrant for more then one student as long as the monthly incomes of the warrantor reach national minimum wage multiplied by number of warrantees.
There are two kinds of loans - one to cover tuition fees (study loan) and other to cover living expenses (student loan). A study loan may be received by students of private higher education institutions or by students who pay their tuition fees in state institutions irrespective of the study form (full-time, part-time, distance learning). A student loan may be given to all students who study full-time in any higher education institution of Latvia. Every year the list of professions is issued by the Cabinet of Ministers for which the study loan can be covered from the state budget. For every year of employment at a state or municipal institution, the amount of the repayable loan may be reduced by 10% (if such an institution is mentioned in the respective list approved by the Cabinet of Ministers).
If the student has a job, every year he may apply for income tax reduction from a certain sum of income, and get this money back from the state budget. Some exemptions exist regarding registration and/or tuition fees as well as requirements for loans, e.g. orphans (up to 24) do not need to find a warrantor in order to receive a loan, and they receive 100% guarantee by the state.
Dormitories are available close to the chosen higher education institution for students whose actual place of residence is too far to travel.
The rules of registration and accreditation of an institution, licensing, registration and accreditation of study programmes are the same for public and private higher educational institutions. Private higher education institutions may offer education not only in the state language (Latvian) but also in other languages.
Private institutions may sign agreements with the Ministry of Education and Science, or other ministries or state institutions about training of certain specialists and thus receive funding from state budget.
Full-time students from private (state-accredited) higher education institutions may apply for loans to cover living costs - "student loans". Loans to cover tuition fees are offered also for part-time students in private higher educational institutions.