Unequal Competition with State Universities Threatens Private University Sustainability in Indonesia

The expansion of new student admission quotas through the independent pathway by State Universities with Legal Entity Status (PTNBH) is assessed to have begun exerting serious pressure on the financial stability of private universities (PTS). This condition could potentially threaten the sustainability of a number of PTS if it does not immediately receive attention from the government. Vice Rector for Education and Student Affairs at Universitas Muhammadiyah Yogyakarta (UMY), Prof. Dr. Zuly Qodir, M.Ag., assessed that this phenomenon has been ongoing for the last four years and shows an increasingly worrying trend. According to Zuly, the unbalanced competition is pushing many PTS to take strategic steps to maintain student numbers, such as lowering Education Development Funds (DPP), providing tuition fee discounts, and expanding internal scholarship schemes. However, this strategy is considered to have serious consequences for the financial health of the institution. “If we accept many students, but then the fees are lowered or we increase scholarships from internal campus funds, the finances of a PTS could collapse. It appears that the number of students is large, but the income received is not proportional,” Zuly said in a press release on Sunday (14/6). He explained that the most critical impact of declining student numbers is the threat of study programme closures. When a study programme no longer has an adequate number of students, its operational sustainability becomes difficult to maintain. “If the number of students continues to decline, the study programme has the potential to be closed. This is a real threat that many PTS must face,” he added. Besides the competition factor with PTNBH, Zuly also highlighted changes in the national higher education landscape. The increasing number of universities in various regions means many prospective students choose to continue their studies closer to their domicile. This condition is reinforced by the weakening purchasing power of the public, which encourages families to seek more affordable educational alternatives. “The public’s economy is increasingly difficult, while universities in the regions are also growing in number. Due to economic limitations, many parents ultimately choose to send their children to school in their respective regions,” he explained. Facing these various challenges, UMY has chosen to implement a number of adaptive measures. One of them is adjusting the minimum score standards for new student admissions in response to the dynamics and needs of the higher education market. Nevertheless, Zuly asserted that adjusting admission standards does not mean lowering the quality of graduates. According to him, UMY is instead committed to strengthening the quality of the learning process so that students with diverse academic backgrounds can still achieve the targeted competencies. “We will maintain quality in the educational process, even though the quality of student input may not be the same as before. We will work harder so that graduates still receive a quality education and have competitiveness in the job market,” he stressed. Zuly hopes the government can create fairer policies for all universities, both public and private. According to him, the sustainability of PTS is also an important part of maintaining access to higher education and the equitable distribution of human resource quality in Indonesia.