Jakarta, IO – The controversy over single tuition fees (UKT) eventually subsided, after Indonesian President Joko Widodo (Jokowi) summoned Education Minister Nadiem Makarim to cancel the 2024 UKT increase for state universities. However, the President did admit the possibility that the UKT increase might be in effect next year, in 2025. Meanwhile, President-elect Prabowo Subianto has voiced his disagreement with the plan to increase UKT, as he expects tuition fees to be free, if possible. Regarding the UKT issue, the Labor Party favors Prabowo’s stance, because it aligns with the Party’s program to provide access to free higher education for the children of Indonesia’s working classes.
What amount of budget is needed to make UKT free in public universities?
The question is, what volume of budget will be required to make UKT free for students in all public universities in Indonesia? Based on the Education and Culture Ministry data, apart from vocational education, Indonesia has 75 public universities across the main islands, with around 1.68 million students. The public university with the largest enrollment, Brawijaya University in Malang, East Java, serves some 56,000 students. Against this, the campus with the smallest enrollment is the Aceh Arts and Culture Institute (ISBI) in Banda Aceh, which serves only 300 students. Thirty public universities have more than 30,000 students, and 20,000 public universities have fewer than 10,000 students.
The single tuition fees (UKT) levied by public universities vary. We attempted to calculate the average UKT for each campus, by totaling the tuition fees from the most pricey group in each department and then dividing it by the number of departments. This approach was taken because we do not have any detailed data for the distribution of the number of students in each state university department. For example, based on our calculations, five public universities with the steepest tuition fees include Bandung Institute of Technology (IDR 14,270,000), State University of Malang (IDR 14,230,000), University of Indonesia (IDR 14,190,000), UPN Veteran Yogyakarta (IDR 13,000,000) and Sepuluh Nopember Institute of Technology (IDR 12,500,000).
By multiplying the average UKT on each campus by the number of students, we expected our figures to differ little from UKT in these universities. Based on our calculations, the total cost of UKT for 75 public university campuses in Indonesia was around IDR 13.1 trillion for one semester or IDR 26.2 trillion/year. Relatively speaking, this is not a substantial amount when compared to the immense state budget (APBN) for education of IDR 612 trillion (20% of the APBN). How difficult will it be to reallocate IDR 26.1 trillion out of IDR 612 trillion for the free UKT in public universities? Perhaps the problem is the ministers’ partiality, who tend to assume that education is a business that must be commercialized to pave the way for student-loan businesses. Even the United States, under President Biden’s administration, has commercialized education for much longer, but recently canceled the total accumulated student loans of USD 167 billion (IDR 2,600 trillion) for 4.75 million US citizens.
Reallocating the education budget and eliminating Pertamax subsidies
Reallocating the budgets from outside the Education Ministry to education has become an urgent matter, as it is necessary to somehow make UKT free for public universities throughout Indonesia. Currently, around one-third of the education budget in the APBN of IDR 612 trillion, or IDR 206 trillion, is allocated to pay teacher salaries and allowances. Only IDR 27.1 trillion, or 4.4% of the education budget, is used to finance the Indonesia Smart Card and the Indonesia Smart College Card. Moreover, what needs to be spotlighted is operational assistance (BOS) for schools and preschools, with a total budget of IDR 55.9 trillion, considering that funds from the BOS budget for schools and preschools are irrefutably vulnerable to leakage – in plain language, corruption.
The current state of corruption estimated for Indonesia has surpassed what was once stated by economic expert Sumitro Djoyohadikusumo – 30% during the New Order era. Other Indonesian economic experts even say that the level of corruption in the Reform era has swollen to 40%, factoring in an additional 10% in the planning phase. However, let us not talk about 40%. Let us consider that the Government can only reallocate 20% of the BOS budget, which will be IDR 11.2 trillion. It means that IDR 15 trillion more is required to finance the free UKT.
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The next step to obtain the remainder of the funds is by eliminating futile subsidies: Pertamax (RON 92) and Pertamax Turbo (RON 95 and above). Pertamax subsidies have in fact only benefitted the rich – those who own luxury cars. This has been seriously hurting the public’s sense of justice. Strangely, officials related to the Minister of Energy and Mineral Resources continue to back this ineffective policy, which tends to fill the deep pockets and quietly removes Pertalite, the type of fuel urgently needed by the poor.
Therefore, in the future, the Government will be expected to force rich people to buy non-subsidized Pertamax at a regular price at Pertamina gas stations. This money will be indirectly used to finance the free UKT program. The consumption of fuel with Pertamax quality or RON 92 was 5.77 million kilo liters last year. Meanwhile, Pertamina’s market share was around 85%, around 4.9 million kilo liters of Pertamax. The price difference between Pertamax at Pertamina gas stations (IDR 12,950) and RON 92 at Shell as stations (IDR 15,540) is IDR 2,550/liter. If the Pertamax fuel consumption at Pertamina gas stations is multiplied by the price difference, the Pertamax subsidy equals IDR 14.7 trillion.
Similarly, the difference between the subsidized Pertamax Turbo (IDR 14,400) and the equivalent fuel at Shell gas stations (IDR 16,570) is IDR 2,170/liter. If multiplied by the Pertamax Turbo consumption of 270,954 (85% of Pertamina’s market share), the Government subsidy for Pertamax Turbo will be around IDR 587 billion. Now, if we add up IDR 587 billion and IDR 14.7 trillion, the result is IDR 15.3 trillion. This figure is what should be eliminated from the subsidized Pertamax and Pertamax Turbo posts. so that that money can be used to fill the crevices in subsidies for the free UKT program.