The tertiary education system faces challenges related to financial sustainability, efficiency in the management of the resources available, relevance and quality of the supply, and lack of equitable distribution of student aid programs.

The Ministry of Education and Higher Education (MOEHE) has responded to this crisis by developing in 2002 (with technical assistance from the Bank) an overall higher education strategy with the aim of making the system more effective, accessible to students from low income households, more relevant to Palestinian economic and development needs, with a more efficient and transparent use of resources, and financially sustainable. Major reforms were proposed under such strategy with the following principles:

• Targeting public funds on programs identified as having high priority;
• Demand-side financing rather than supply-side financing;
• Promoting quality through competitive funding of selected projects;
• Promoting institutional investments for expanding capacity and improving quality through competitive grants and resource mobilization;
• Promoting research through competitive funding;
• Improving the management of the higher education sector and institutions; and
• Promoting vocational and technical education enrollments as a share of total higher education enrollments.

The Tertiary Education Project will contribute to the overall economic and social development of the PA, as a skilled work force is a determining factor of economic growth and the development of an economy able to compete in international markets. Unemployment and lack of education are, respectively, the first and second most important factors in determining the likelihood of being poor in the WB&G. More so, this Project will contribute to the development of a viable Palestinian State, as tertiary education institutions and graduates play a key role in the process of reconstruction, nation-building and the promotion of a democratic society and political system.

Project Development Objectives

The project development objectives are to: (i) improve the policy making environment for tertiary education management, governance and quality assurance; (ii) increase internal and external efficiency of tertiary education institutions as a first step towards achieving sustainability; and (iii) create incentives and provide the basis for improvements in quality, relevance and equity of tertiary education institutions in order to meet the socio-economic needs of the Palestinian population.

Key Development Indicators

• Increased percentage of new entrants into priority area programs (defined by relevance to market and socio-economic needs) from 32% in 2004 to 40% by 2009.
• Increased percentage of new entrants into technical colleges from 19% in 2004 to 27% by 2009.
• Improved sector policy development measured by preparation of Tertiary Education National Strategy by the end of 2006.

Summary Project Description

Component 1: Strengthening the policy making role of the MOEHE, HEC and AQAC

The objective of this component is to strengthen the capacity of the MOEHE, the Higher Education Council (HEC), and the National Accreditation and Quality Assurance Commission (AQAC) to formulate, plan and monitor the tertiary education policy framework for the WB&G. To achieve these objectives, the Project will provide support to the following activities.

Subcomponent 1.1 - Tertiary Education Policy Development and Management.

To this end, the Project will provide support to the DG of Planning at the MOEHE that will be capable of conducting analytical reviews regarding the performance of the tertiary education sector as a whole. The Department’s capacity will be developed in order to be able to coordinate and develop plans and policies for the sector in collaboration with stakeholders and development and cooperation agencies. Activities under this subcomponent will include:

• Establishing a tertiary education Planning Unit and recruiting local expertise in planning and educational policy for the purpose of producing reports about the system performance on annual basis.
• Formation of a planning committee composed of Ministry and representatives from tertiary education institutions that will meet regularly to discuss and decide on policy issues of the system and prepare technical documents to be submitted to the HEC.
• Conducting study tours for the planning unit to similar regional and international institutions or bodies.
• Training existing staff at the DG of Planning on data analysis, reporting and dissemination of results.

The Project will also provide support to ensure that the HEC will function as a tertiary education council, representing the needs of the universities, community colleges, stakeholder representatives, such as staff members and students, and the private sector. To increase governance, the HEC will extend its members to include private sector representatives and student organizations.

Subcomponent 1.2 - Support to AQAC.

This subcomponent will provide technical assistance to enhance and reinforce the MOEHE’s existing capacity to set quality and management standards able to meet and compete with international standards. Standards for the following will be defined: program and curriculum development, student/teacher ratios, qualifications and status of faculty, student admissions, academic performance, and monitoring and evaluation of programs. This subcomponent will support the existing independent accreditation and evaluation commission, and provide support to set up evaluation teams and conduct the evaluation of priority area programs through a peer review system. It will also provide the support needed so that this commission will operate following international standards and trends, and develop networking activities with international agencies.

Subcomponent 1.3 - Support to the establishment of a Tertiary Education Management and Information System (TEMIS)

Based on the needs assessment on information technology (IT) conducted with financial support from USAID, the Project will support the MOEHE and tertiary institutions in establishing a system that will provide relevant and timely information on enrollments, fees, academic programs, actual resources and standards, student aid programs, financial status, employment rates of graduates, of all institutions. The Project will provide the training and human resources needed to set up and manage the information system in an efficient way, and improve its capacity to produce reports that will shape policy making and planning. To this end, the Project will provide support for the following:

• Develop an IT system that is capable of integrating a variety of relevant data, produce comprehensive reports, and links with other demographic and economic information;
• Recruit and train existing staff at the DG of Planning on the use of IT;
• Produce a set of standardized indicators to be used for the planning processes;
• Provide necessary hardware and software.

Component 2: Increasing the internal and external efficiency of tertiary education institutions

The objective of this component will be to improve the internal and external efficiency of the universities and technical colleges. To meet these objectives, the Project will support the following activities: Supporting institutional planning and management. Based on the Budget Trade-off Model (BTM) designed for the preparation of the Financing Strategy in 2002 through the support of a PHRD grant, the model was updated, and an institutional model was prepared. The use of the BTM will allow institutions to plan and manage resources in a more efficient way. In order for institutions to collect relevant information, data hubs will be established within the institutions, either separately or embedded within the institution’s existing planning units. These hubs will collect information from various departments or units, including financial offices, registrars, student-aid office, and others, and will serve as the focal point for liaising with the DG of Planning at MOEHE.

Universities and colleges will receive support to start the strategic planning process. Over time, with the growing availability of information emerging from the information system, institutions will move from simple bench marking of performance to institutional development plans to strategic planning. Institutional development plans will include: (i) an institutional mission statement; (ii) a management improvement plan; (iii) enrollment and staffing projections; and (iv) financial performance and projections.

Project funds will support the following activities:

• Conducting a comparative study about existing management structures and practices at tertiary education institutions;
• Organizing a specialized workshop to discuss the result of the comparative study and define needs for improvement;
• Establishing a set of standard management procedures and practices, including budgeting, program development, and planning manuals;
• Supporting institutional self-assessment and quality improvement. This activity will provide support to enhance the capacity of universities and colleges to conduct institutional self-evaluation and develop institutional improvement plans.

Component 3: Improving quality at tertiary education institutions

The main objective of the Quality Improvement Fund (QIF) is to provide support to improve the quality of Palestinian tertiary institutions and programs so they are (i) relevant to the job market and economic development of WB&G; (ii) made competitive with international standards; and (iii) capable of developing income generating programs. The QIF is, therefore, closely linked to the national accreditation process and the institutional self-evaluation initiative.
The QIF will facilitate a change of culture in the financing of tertiary education in WB&G, the setting of national priorities in the sub-sector, and a new framework for the relationship among tertiary institutions, and between those institutions and both the private and the public sectors.

All tertiary institutions (universities and technical colleges) in the WB&G which are licensed and accredited by the MOEHE are eligible to apply for QIF grants. Eligibility for applying for QIF grants is further dependent on the university or college having an Institutional Plan for Quality Assurance and Self-Evaluation (which will receive targeted funds under Component 2 of this Project). Priority will be given to grant proposals that meet content and process priorities.

The procedures for grant application, approval processes, eligibility criteria, and grant implementation are detailed in the QIF Manual, prepared with support from a PHRD Grant.

Component 4: Building capacity to improve and expand the student aid program

The objective of this component is to improve the management and performance of the student aid scheme (including loans, grants and scholarships). Strategically, the Student Revolving Loan Fund (SRLF) is a critical element of the financing strategy of the MOEHE, and the necessary complement of the tuition fees policy. The actions to be undertaken by the MOEHE and to be supported by the project address the three types of issues identified regarding the SRLF: strategic, financial, and managerial.

Improving Management, Structure and Operation of the Student Revolving Loan Fund (SRLF): The student aid program is in need of profound change and improvement which cannot be applied in a single intervention. Three cohorts of students, and three corresponding types of interventions have been identified:

• students who have received a loan and have already exited the education system,
• students who have already received a loan and are still in the system, and
• students who have not yet entered the tertiary education system.

The strategy to be followed will be to: (i) launch an awareness campaign to sensitize students who have graduated (and the population at large) about the student aid scheme, especially the expectation for repayment; (ii) commission an action-oriented study to develop a comprehensive list of former students (including drop outs) who have an outstanding loan; and (iii) turn to various government departments (Interior, Finance, etc.) and agencies (e.g., employer organizations) for help in recovering funds from individual whose coordinates have been identified. Former students employed with the PA should be particularly easy to reach and from whom repayments through salary withholdings can be received.

Students of the second cohort who are still attending a tertiary institution constitute the current existing live‌ - portfolio. For these students, the MOEHE will enter into an agreement with commercial banks that will take over the administering existing student loans, as well as new loans students will be taking during the rest of their studies. This solution is a transitional arrangement which will be operating until the new student aid program is in place, (within 18 months).

Building a student aid program for the future: The new strategy will aims to optimize a variety of factors and a kit of instruments to achieve sustainability, equity (free at point of use), and relevance (priority fields).

Factors:

(i) level of unit/normative costs across fields of study; (ii) sources of financing (PA, donors, students, sale of goods and services); (iii) efficiency parameters (e.g., teacher/student ratios).

Instruments: fees, loans, and grants

To ensure that the new student aid program will be conducive to greater equity, specific criteria will be developed to allow for a respective selection of students who are eligible to receive loans and grants. These criteria will be combined with those linked to the priority fields of study that the MOEHE will retain (based on the PA Mid-term Economic Plan).

Governance:

Transparency and objectivity are pre-requisites for the future student aid scheme to be both credible and sustainable. The future aid system will need to be protected from political interference, and will be built on criteria and rules ensuring equity. Therefore, the respective roles, mandates and status of (i) the MOEHE, (ii) the SRLF management unit, (iii) the SRLF Board, and (iv) the TEIs (as far as student aid is concerned) will need to be reviewed, and the independence of the SRLF Board needs to be ensured.

At a strategic level, because they are closely interrelated, loans and grants will be considered as part of a common set of tools to reach agreed objectives, however, in terms of management, they will be dealt with separately.

For more information about the Tertiary Education Project, See: Project Appraisal Document (PAD)