Introduction
The human factor is one of the fundamental factors of country’s well-being. Only educated and healthy population can become a productive force that creates national wealth. Nevertheless, the development of human capital requires certain investments, and they are necessary and justified today. That is because the education forms the labor force. Therefore, educational institutions are subject to different pressures and impacts from external public activities of various categories, especially from economic point of view. The goal of the paper is to explain relevant economic pressures as the most important factor in the education.
Types of Economic Pressures in Education
Educational institutions, with some exceptions, continually face economic problems. They all, despite their financial condition, rely on external components for economic continued existence, taking into account (Education Encyclopedia of State University):
- Tuition expenditure paid by students and their relatives;
- Government finances for current expenditures;
- Research and training grants and agreements from a variety of outside agencies;
- Charitable donations from graduates and practicalities; and
- Revenue-generating ventures (for example, for some intercollegiate games).
As for institutions, the main source of financing the cost of education is the state budget. An important role in the financing of the cost of educational institutions belongs to their own income derived from the provision of educational services, research activities, as well as corporate funds received for free (Eurostat, 2013). For example, the effective management of budgetary institutions and rational use of both low cost and extra-budgetary resources directly affect the quality of educational processes. Universities should develop in line with new trends and challenges in education, but do not forget about maintaining financial stability through quality assurance. In general, finances of the university can be represented as a set of monetary relations, within which implementation centralized and decentralized funds of finances are formed in order to meet the objectives for the successful development of the university in accordance with modern educational technologies.
As regards economic pressures from the students’ point of view, it is worth to mention that most of the money a student spends on housing, excluding tuition fee. It is known that the price of the accommodation depends on its location, equipment and standard of apartments. Accordingly, the price will be lower in the less popular areas of the city far from the center (Trombitas, 2012). In addition to tuition fees and payments for accommodation, there are additional costs on food, transportation, insurance, clothing, books and other unforeseen expenses.
Moreover, outside economic pressures influence private institutions. As the wealthiest establishments have donations that ensure an assessment of financial strength, the majority of private institutions depend mostly on education earnings. There is a fact that tuition growth in the 1990s exceeded the rate of inflation and in the beginning of the twenty-first century students organized resistant actions to high rates of payments for the education, and particularly to fast tuition increases. Thus, private institutions have been compelled to restrict tuition growth, and this has influenced their economic feasibility in competitive conditions (Education Encyclopedia of State University). For example, based on the study of Advisory Committee on Student Financial Assistance it was found that the main reason of inability of students from low-income families to earn bachelors degree was not the aspiration for higher education, but the money paid (Herman, 2014).
According to the research of Economist Intelligence Unit in 2012 Finland was the leading country, where the education system was the best. Currently it occupies 5th position, but still has advantages in educational development (The Learning Curve, 2014). First of all, a lot of attention of the state to the education should be noted because all of it is free in schools and universities. The schools are given free textbooks and free food and children are brought to school by bus. Kindergartens are also publicly available as they work from 6 a.m. till 6 p.m., which is very convenient for parents working in different shifts. Also, the higher education is without charge, including for international students. Educational institutions at all levels are well equipped. The level of professional education is fairly high in Finland. The country has an extensive network of professional schools, for admission to which there is no need to take special examinations (Taipale, 2012). In 2014 South Korea takes the first position (The Learning Curve, 2014). In recent decades, the level of South Korean universities has increased significantly, which confirms the growing number of foreign students who get there the most advanced theoretical and practical knowledge. Top Universities in South Korea receive charitable financial contributions that ensure them a high standard of training staff with up to date technical equipment.
Conclusion
Economic pressures will always accompany educational sphere at all levels, namely state, educational institutional and personal. Government expenses, level of inflation, population creditworthiness, economic growth and development of labor force market will affect education field differently, from an appearance of new courses in order to comply with market trends to the development of education system in general. From the other side, personal opportunities like ability to pay for education and other relevant costs will help institutions to optimize financial element and provide with appropriate courses.
References
Education Encyclopedia of State University (n.d.). Higher Education in Context – Economic Factors, An Era of Competition, Demographic Realities, Governmental Political and Legal Challenges, Religious Factors. Retrieved from http://education.stateuniversity.com/pages/2041/Higher-Education-in-Context.html
Eurostat (2013). Educational expenditure statistics. Retrieved from http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Educational_expenditure_statistics
Herman, J. (2014). Economic Factors in Education. Retrieved from http://www.ehow.com/info_7863720_economic-factors-education.html
Taipale, A. (2012). International Survey on Educational Leadership. A survey on school leader’s work and continuing education. Retrieved from http://www.oph.fi/download/143319_International_survey_on_educational_leadership.PDF
The Learning Curve (2014). Index of cognitive skills and educational attainment. Retrieved from http://thelearningcurve.pearson.com/index/index-ranking
Trombitas, K. (2012). Financial Stress: An Everyday Reality for College Students. Retrieved from https://www.cgsnet.org/ckfinder/userfiles/files/Inceptia_FinancialStress_whitepaper.pdf
