Public funding accounts for 85% of all funding of Higher Education in EU (Eurydice); the economic crisis leads governments to cut public expenditures; education is among the first sectors to fall victim of budget cuts.
The EU in “Modernisation of Higher Education in Europe: Funding and Social Dimension” clearly summarizes this trend: “the economic downturn led to a decrease in public funding, while demand for higher education continues to increase”. The EU also states that students pay the price: “financial burden is increasingly being shifted to students”; hence the immediate need to address the financing of HE for students: “subsequent social challenges need to be offset” (Modernisation of HE in EU).
Financial inclusion of HE students to fund their education is hence an utmost priority for EU: such priority is recognized by Erasmus+ Horizontal Priority 6, p 121 of Programme Guide: “Sustainable investment, performance and efficiency in education”. SHIFT will develop a model able to attract private actors and capital. In addition, SHIFT is a “priority topic” as it is an innovative approach to increase the efficiency of public expenditure and investment in education, including new funding models such as public-private partnerships.
Against this background, SHIFT has the objective of alleviating the financial burden of access to and participation in HE of students while increasing the efficiency of public spending in HE by developing an innovative model of virtuous Public Private Partnership based on a financial instrument and model (mix of endowment fund and investment fund) that will generate increased financial resources to be distributed as grants, matching grants and soft loans for HE students. SHIFT is a new funding model that pools financial resources from both the public and private sectors, serving the dual purpose of
- increasing efficiency of public expenditure: SHIFT enhances the sustainability of public resources by generating additional funding opportunities for scholarships of university students. The public funds allocated into the SHIFT model (the endowment fund) will be invested (through the investment fund) and only the profits generated will be disbursed (through grants and soft loans) to students, hence keeping intact the capital (here the sustainability of the public funds)
- mobilizing private resources: SHIFT establishes a virtuous mechanism of public and private partnership. Not only SHIFT pools funds from public and private sectors but also will consolidate public and private attitudes towards facilitating access to finance for HE students.