Behind the Shrinking Portion of the State Budget in State Universities with Legal Entity Status

The declining proportion of the state budget (APBN) in the funding of state universities with legal entity status (PTN-BH) has sparked polemics in recent years, with a common public assumption that the government is increasingly relinquishing its responsibility to finance higher education. The basis for this argument is simple: the proportion of APBN funds relative to the total income of PTN-BH continues to decrease, leading to conclusions that universities are being forced to raise their own funds through increases in single tuition fees (UKT), opening independent admission pathways, and the commercialisation of education. This narrative sounds logical, but logical does not necessarily mean correct. The primary error lies in how the data is read; a decrease in proportion does not automatically signify a decrease in nominal value, as the percentage can shrink not because the numerator is reduced, but because the denominator is growing much faster.

Before concluding that the government is reducing funding for PTN-BH, one must first determine whether the nominal value of government assistance has truly declined, or if university income from other sources has simply grown at a much faster rate. Audited financial reports from the Ministry of Higher Education actually show a different trend. Spending on Assistance for State University Legal Entity Funding (BPPTN-BH) increased from approximately Rp1.54 trillion in 2020 to Rp4.08 trillion in 2024, with a surge of around 75 percent in 2024 compared to the previous year. This increase is attributed to the implementation of new programmes, such as Strengthening PTN-BH Excellence and the Development of Inter-University Centres of Excellence (PUAPT). This implies that, in nominal terms, the government is not withdrawing from PTN-BH funding; while the amount of assistance fluctuates annually according to policy and fiscal space, the general trend is one of increase.

The reason the APBN proportion continues to decline is found on the other side of university financial reports. An analysis of a sample of six PTN-BH institutions—Universitas Gadjah Mada, Universitas Airlangga, Universitas Diponegoro, Institut Teknologi Bandung, IPB University, and Institut Teknologi Sepuluh Nopember—shows an almost identical pattern. At Universitas Gadjah Mada, for instance, APBN-derived income remained in the range of Rp900 billion to Rp1 trillion during the observation period, while non-APBN income nearly doubled from around Rp1.60 trillion to over Rp3.18 trillion. Institut Teknologi Bandung increased its non-APBN income from approximately Rp820 billion in 2018 to more than Rp2 trillion in 2024, and Institut Teknologi Sepuluh Nopember saw a rise from around Rp721 billion to Rp1.72 trillion in just five years. Almost all these universities received APBN funds in a relatively stable or even increasing nominal amount; what changed was the magnitude of income from other sources, causing total income to grow much faster than APBN contributions and thus mathematically reducing the APBN proportion.

This diversification of funding is a consequence of the autonomy granted to PTN-BH under Law Number 12 of 2012 on Higher Education. The law provides significantly greater flexibility in organisational governance, financial management, and academic development compared to other forms of higher education institutions. This leeway allows PTN-BH to be more adaptive in opening new study programmes, developing professional education, expanding postgraduate programmes, enhancing research collaborations, strengthening teaching hospital services, optimising asset utilisation, and developing various other academic services. This flexibility is not merely a means to obtain additional revenue but is an instrument to boost the international competitiveness of Indonesian universities, enabling them to develop into world-class research universities and improve their standing in global rankings—a target difficult to achieve if institutional development relied entirely on the state budget.