Reform Towards Quality and Integrated Higher Education
Responding to an article by the Director of Higher Education at the Ministry of Higher Education, Science, and Technology, which argued that quality higher education is the key to achieving the Golden Indonesia 2045 vision, the discussion highlights a compelling and systematic argument built on human capital and endogenous growth theories. This view aligns with international bodies like the OECD and UNESCO, which affirm that investment in higher education is a productive investment determining a nation’s competitiveness. The narrative successfully reframes education not as a sector that drains the budget, but as a primary lever for economic, social, and environmental development.
A major concern is the existence and role of private universities (PTS) within the national ecosystem. An undeniable fact is that 3,944 out of 4,303, or about 91.7 per cent, of higher education institutions in Indonesia are private. Furthermore, around 44.95 per cent of Indonesian students attend PTS, which run 54.8 per cent of all available study programmes. Ironically, most PTS are currently facing existential issues, declining student numbers, and the threat of programme closures. Beyond economic factors, this decline is partly due to minimal regulation governing student intake quotas and patterns outside the national selection pathways for public universities. The drop in student numbers directly impacts the financial ability of PTS to fund operations and improve quality. Therefore, the push for investment to build a quality higher education ecosystem must also be directed at PTS.
The national higher education financing model still relies heavily on the annual state budget, student tuition fees, and various short-term competitive grants. This model is not designed to build institutional capacity sustainably. The world’s best universities thrive not just on government support, but through endowment funds, alumni philanthropy, industry research partnerships, and other long-term funding sources. While Indonesia has an Education Endowment Fund managed by LPDP, there is no specific instrument to strengthen higher education institutions, especially private ones. If Indonesia is serious about making higher education a strategic investment, reforming private higher education financing cannot be postponed. The government should consider establishing a performance-based endowment fund for private universities. PTS with good governance, high academic quality, strong research productivity, extensive industry partnerships, and a real contribution to regional development would be eligible for this long-term investment support, fostering healthy competition and institutional sustainability.
Furthermore, the role of the Higher Education Service Institutions (LLDikti) as a liaison between the government and PTS must be expanded. Its function should not be limited to administration, reporting, and regulatory compliance oversight. In the future, LLDikti must evolve into a higher education development agency, functioning as a strategic partner for PTS in quality improvement, institutional capacity building, and facilitating partnerships with industry and local government.