1

Tuition fees in Spanish Public Universities in the academic year

2012-13

Cecilia Albert Verdú Universidad de Alcalá

José Manuel Roig Cotanda Universitat de València

May 2013

1 Introduction

The economic crisis continues to impose severe restrictions on government spending.

Consequently, we predicted1 a substantial rise in tuition fees in Spain due to the

economic downturn and the spiraling costs of higher education. This increase then

occurred in the year 2012-13 through a qualitative change in the framework of funding

for Spanish universities.

Indeed, the Royal Decree-Law 14/2012, regarding urgent measures to rationalize

public spending in education, specified how prices2 should be set in public higher

education, in a way that had not been done previously.

In our opinion, these changes may have far-reaching consequences on the funding

model for higher education in Spain. Thus, we consider it opportune to analyze and

discuss these first steps, in order to provide us with a better understanding of where

we are going in the near future.

Our paper is structured as follows. In section 2 we develop the new regulatory

framework on university funding set out by the Royal Decree-Law. Then, in section 3,

we look into the cost of the service provided by higher education institutions, and

examine how they are approaching their costs accounting analysis, as well as assessing

the present state of affairs. Section 4 describes the increase in tuition fees in 2012-

2013. In section 5 we investigate the different factors which can help explain this

increase; indeed this accounts for the core work of our analysis. The study ends with

the conclusions derived from the previous sections in an attempt to better understand

the funding system for higher education in Spain.

2. The new regulatory framework for university funding

Under Article 81.3.b) of Organic Law 6/2001, of 21 December, regarding Spanish third

level education (BOE 24-12-2001) until academic year 2011-12 public university tuition

1 Albert, C. and J.M.Roig (2011) p. 31 2 Prices or tuition fees are used interchangeable along the paper

2

fees were fixed by each autonomous region in Spain, within the limits set initially by the

University Coordination Council3 (until 2007) and later by the General Conference for

University Policy (from 2007).

The limits were set as a price range for both degrees and higher diplomas. The lower

threshold was linked to the previous year’s inflation rate in accordance with the

Consumer Price Index (CPI) and the upper threshold was obtained by adding to CPI x

percentage points, ranging x from 1% to 4%, over the last seventeen academic years

(this is from 1994-1995 to 2011-12)4.

The Royal Decree-Law 14/2012, of April 20th, sets the thresholds in tuition fees for

universities in order to approximate them to the cost of service provision (Article

6.Five.2 amending Article 81.3.b of Organic Law 6/2001). Although since 2007 the

power to set tuition fees corresponds to each region these must be set within the limits

established by the General Conference for University Policy. These limits are related to

the costs of service provision in the terms set out in the aforementioned Royal Decree –

Law as stated below:

“1st Degrees: tuition fees cover between 15 per cent and 25 per cent of costs for first time enrollments, between 30 per cent and 40 per cent of costs for second time enrollments, from 65 per cent and 75 per cent of costs in third time enrollments, and between 90 per cent and 100 per cent in costs from fourth time enrollments. 2nd. Master Programs which qualify for regulated professional activities in Spain: tuition fees cover between 15 per cent and 25 per cent of costs for the first registration; between 30 per cent and 40 per cent of costs for second registration, between 65 per cent and 75 per cent of costs for the third registration, and between 90 per cent and 100 per cent of costs for the fourth registration. 3rd. Master Programs not included in the previous section: tuition fees cover between 40 per cent and 50 per cent of costs for the first registration and between 65 per cent and 75 per cent of costs for the second registration. "

3 The Organic Law 6/2001 on Universities (LOU) established, in Article 28, the Council of University Coordination as maximum advisory and coordination body of the university system. The Organic Law 4/2007 amended the LOU and replaced the former University Coordination Council by the General Conference for University Policy. 4 See tab "Serie horquilla precios GRADO" in the document entitled "Estadística de precios públicos

universitarios curso 2012-13" retrieved on October 5th, 2013 http://www.mecd.gob.es/educacion/universidades/estadisticas-informes/estadisticas/precios-publicos.html. Note, moreover, that the transfer of higher education to the regions began in 1985 (Cataluña, País Vasco and Valencia) and was completed in 1996 (La Rioja, Castilla-La Mancha, Cantabria, Baleares and Aragón).

3

Since the Royal Decree-Law establishes parameters concerning service costs within

which regional governments can operate, the first question we would like to know is

whether each autonomous government possesses comprehensive information on

these costs. Secondly, we wish to analyze the response of the autonomous regions in

relation to the establishment of tuition fees within the established interval and

whether we can detect any significantly different behaviors.

Should we find any considerable differences, it would be most interesting to

investigate these further to discover those factors leading to divergence. In other

words, our aim is to find explanations behind the decision-making process of regional

governments. Explanations may be related to factors such as financial stress within

each autonomous region, an indicative measure of which could be its debt in terms of

GDP, or indeed the political make-up of the government in power in the region.

Related to the data we need for our analysis, we have information on tuition fees for

the year 2012-13, which is the first year of implementation of Royal Decree-Law, this

information is provided by the Ministry of Education, Culture and Sports5; and in

connection with the debt levels of the autonomous regions we include time series

analyses provided by the Statistical Bulletin of the Bank of Spain6.

3. Cost accounting in Public Universities

Probably one of the most important difficulties to comply with the Royal Decree-Law

14/2012 is the difficulty of knowing the cost of the service. This question is not so

trivial, neither from the theoretical nor practical point of view (see Carrasco et al., n.d.,

Lizcano, 2012, Malles and Del Burgo, 2010). From the practical point of view, knowing

the cost of the service means that universities develop cost accounting, but the reality,

as we shall see, is that many of them lack such an instrument.

We agree with Hernández Armenteros (2006: 94-5) when he says, "The determination

of funding requirements for the provision of a service, in our case university service, is

closely and directly related to the cost structure representative of the factors required

for their provision, with the universe to which it is intended and with the efficiency you

want and hope to achieve. Within the Spanish public university system it is notorious

that funding needs are not being determined by processes as logical as that just

described and, although this may have been understandable in the past, at the present

time persisting in this direction is, at least an act of negligence on the part of agents

with direct responsibility in this matter."

5 http://www.mecd.gob.es/educacion/universidades/estadisticas-informes/estadisticas/precios-

publicos.html 6 http://www.bde.es/webbde/es/estadis/infoest/bolest.html

4

However, Lizcano (2012: 9) downplays the importance of this tool when he says, “it is

significant and somewhat singular that the regulation of the amount of something as

substantial and supposedly objective and equitable such as university fees was based

on a scale so subjective, complex and diverse as are the costs of universities."

Today there is not a unified system for all universities and moreover not all universities

have such a tool, despite several initiatives. These include initiatives as distant in time

as the Analytical Accounting System for Universities (Sistema de Contabilidad Analítica

para Universidades, SCAU) conducted in 1991 by the universities of Alcalá, Carlos III

and Autónoma de Madrid; the start of the project launched by the IGAE (Intervención

General de la Administración del Estado) in 1994 Analytical Accounting Standard for

Autonomous Administrations (Contabilidad Analítica Normalizada para Organismos

Autónomos, CANOA); the Sorolla project; another project in collaboration between the

IGAE and the Office for University Cooperation (Oficina de Cooperación Universitaria,

OCU); as well as other pioneering initiatives in different universities (Oviedo, Jaume I,

Cadiz, Zaragoza, Las Palmas, ... ).

In our view this claim from Hernández Armenteros (2006: 88) still remains valid "Today

the application within universities of an Integrated Information Accounting System is

more a political challenge rather than a technical one, although conceptual,

instrumental and technology issues are important and must be resolved prior to

implantation in our institutions of integrated accounting information.”

However, the process of implementation of cost accounting in every university has a

recent history. The Council of Universities and the University Policy Conference

meeting on April 26th, 2010, established that during the period 2010-2013 all Spanish

universities had to consider the implementation of a cost accounting system with

which to consider the actual costs of the various activities undertaken by universities

and thus be able to relate costs to funding for those activities.

Since 2009, they had been working in this direction. In December 2009 the Joint

Committee on Finance decided to create a commission to develop a cost accounting

model for Spanish higher education that would conform to the various missions of

Spanish public universities.

In September 2010 the commission completed the document entitled Analytical

Accounting Model for Universities relying on the consensus of all members of the

commission.

In December 2010, the document was sent to all members of the University Council, of

the General Conference for University Policy, and members of the Observatory of

Scholarships, Grants and Academic Performance.

5

After a period of brief consultation, the final version of the Analytical Accounting

Model for Universities was presented on March 10th, 2011 in the Joint Committee on

Finance, where it was approved.

Subsequently, both the Council of Universities and the University Policy Conference

approved the document (March 17th, 2011 and March 24th, 2011 respectively).

Getting to this point, as Rodríguez Plaza (2012: 3) mentions "not imply reaching a goal,

but rather it means the first step of the implementation process of the, otherwise

unavoidable, cost accounting system at each university."

As of April 1st, the implementation process began coordinated by the commission of

efficiency, effectiveness and accountability (Observatory of Scholarships, Grants and

Academic Performance). It will be responsible for carrying out monitoring of the

implementation of cost accounting in universities.

According to the information gathered by the commission of efficiency, effectiveness

and accountability, in October 2011 there were 21 universities that had decided to

implement the OCU’s proposal, 8 universities chose the CANOA, while 8 other

institutions chose different systems7.

According to Rodríguez Plaza (2012:18) at the end of 2012 about 20 documents on

CANOA model customization had been presented, of which only 6 had been validated

by the IGAE. And as for the computer implementation of those 6 documents, 1 was

done for OCU, 3 for CANOA and 2 for other systems. Comparing these data with the

deadline for the implementation process (see Appendix 2. - System Implementation

Plan for Universities Analytical Accounting Cost Analysis Model for Universities) we can

concur with Rodríguez Plaza (2012:20) that "the degree of compliance, we can say

universities that are «keeping up with» deadlines, is very small."

Therefore, in our view the provisions of Royal Decree-Law 14/2012 were impossible to

meet at the time of its publication in the Official Gazette on April 21st, 2012 and on

that date the cost of providing the service was unknown.

We do not want to end this section without pointing out that the establishment of

tuition fees as a percentage of cost opens the door to differentiate between

universities and between centers with different costs. Furthermore, this differentiation

is not only related to costs but also to students, objectives, specialization and quality.

The different pricing between universities and even between centers could be a first

step to differentiation and competition among universities. Indeed, not all universities

are equal. In this sense if we look at the international experience we observe that

7 Information provided in the Report of the Commission on Efficiency, Effectiveness and Accountability

(2011), document retrieved on May 20th, 2013 on the website of the Social Board of the University of Valladolid http://consejosocial.psc.uva.es/Paginas/Biblioteca-documentacion.aspx

6

tuition fees at Oxford and Cambridge are not the same as those of other British

universities, neither in United States are those of Harvard, Princeton and Yale

comparable to other American universities.

Barr (2012: 312-13) argues for competition in the field of higher education in terms of

both efficiency and equity. From efficiency perspective, on the demand side it will be a

misallocation of resources if students cannot use price as a signal, while on the supply

side price ceilings erode incentives to improve quality, and price floors erode

incentives to improve efficiency. Therefore, Barr concludes that the argument for

introducing competition in the field of higher education is not ideological. Also from

the point of view of equity there are arguments to defend differentiated prices. The

differentiation may allow charges to those who can pay and redistributive policies help

those who cannot pay.

4. The increment of tuition fees

Pursuant to Royal Decree-Law 14/2012 the 2012-2013 academic year marks a turning

point in the model for Spanish university funding to the extent that an almost general

increase in tuition fees entails an increment in tuition fees differences between

regions. Table 1 shows the increase in tuition fees by regions, this has been clearly

higher for master’s degree programs than for undergraduate degree programs in

almost all cases8.

Regarding undergraduate degree programs, these fall into two distinct groups: the first

group includes the autonomous regions that did not raise their fees (Asturias and

Galicia) or did so below 20%; while those in the second group increased their fees by

more than 20% (Castilla-La Mancha, Valencia, Madrid, Castilla and Leon, Canarias and

Cataluña). With regard to the master’s degree programs we can divide these into three

groups: first, autonomous regions that have increased prices by less than 10% (País

Vasco, Galicia and Baleares);second, regions that have increased fees by more than

100% (Madrid, Cataluña, Andalucía and Canarias); and the third group, where the

remaining ten autonomous regions allocated increases of between 10% and 100%.

8 For this analysis, unlike Duch (2009), we do not need to take into account inflation differentials

between regions

7

Table 1. Undergraduate and non-professionalizing master’s degree programs average annual increase in tuition fees, academic year 2012-2013, by regions.

Autonomous Region Undergraduate

programs Autonomous Region

Master programs Non

professionalizing

Asturias 0,00% País Vasco 2,00%

Galicia 0,00% Galicia 5,83%

Extremadura 1,91% Baleares 7,32%

País Vasco 2,00% Castilla-La Mancha 39,85%

La Rioja 2,12% Asturias 45,54%

Andalucía 2,38% Extremadura 48,36%

Aragón 3,60% Murcia ) 61,31%

Cantabria 3,60% La Rioja 63,36%

Navarra 4,00% Castilla y León 63,73%

Baleares 9,21% Cantabria 65,75%

Murcia 11,79% Navarra 66,41%

Castilla-La Mancha 20,33% Comunidad Valenciana 76,23%

Comunidad Valenciana 33,34% Aragón 96,72%

Madrid 38,09% Madrid 121,01%

Castilla y León 41,85% Cataluña 130,82%

Canarias 42,11% Andalucía 144,20%

Cataluña 66,67% Canarias 170,77% Source: Ministerio de Educación, Cultura y Deporte: http://www.mecd.gob.es/educacion/universidades/estadisticas-informes/estadisticas/precios-publicos.html

Now, let us look at the increasing differences in tuition fees that caused the uneven

change in prices during 2012-2013. The differences between regions are higher in

undergraduate than in master’s programs. As mentioned above, in all the autonomous

regions tuition fees for master’s programs have increased more than undergraduate

degree courses, except in País Vasco where at both levels the increase was about the

same and in Baleares where fees for master’s programs increased by almost two

points less than undergraduate degrees. Table 2 outlines some descriptive for all

autonomous regions for academic years 2011-2012 and 2012-2013, to allow for

comparisons.

In the case of undergraduate degree courses, during 2011-2012 there was a maximum

difference between regions of €9.40 per credit for first registration. The minimum fee

(€10.71) was in Canarias, while the maximum was in Cataluña with a fee of nearly

twice that. During 2012-2013 these differences have increased and multiplied more

than twofold. In master’s programs, differences have multiplied by four: while during

2011-2012 the difference between the most expensive and the cheapest regions was

€10.31 euro per credit, in 2012-2013 this increased further to €45.04.

8

Table 2. Descriptive chart showing average tuition fees per credit in first enrollment, by region. Academic year 2011-2012 and 2012-2013 (in euro).

N Range Minimum Maximum Average

Standard Deviation

Academic year 2011-2012

Undergraduate Degree courses

17 9,40 10,71

(Canarias)

20,11

(Cataluña) 15,35 2,74

Master’s Degree programs

17 10,31

20,63

(Castilla La-

Mancha)

30,94

(Castilla and

León)

25,86 2,96

Academic year 2012-2013

Undergraduate Degree courses

17 21,63 11,89

(Galicia)

33,52

(Cataluña) 18,02 5,32

Master’s Degree programs

17 45,04 26,49

(Galicia)

71,53

(Canarias) 44,56 14,96

Source: Ministerio de Educación, Cultura y Deporte:

http://www.mecd.gob.es/educacion/universidades/estadisticas-informes/estadisticas/precios-publicos.html

In short, tuition fees have raised more for postgraduate programs than for

undergraduate courses and this holds true for differences across regions9.

Undoubtedly, both the increase in tuition fees and the increasing differences between

regions will be affected by total demand for undergraduate and master’s programs

and its distribution across regions (and universities). This variation in demand, along

with rising tuition fees, could help us know whether universities have really increased

their resources or not.

It is expected that, ceteris paribus, the demand for university education holds a

negative relationship with the increase of tuition fees (if fees increase, then the

quantity of education will subsequently decrease). From economic point of view the

total price of a college education is its opportunity cost, which includes direct costs

(tuition and materials) and indirect costs (such as wages that students fail to earn by

attending university). However, we also know that the indirect cost of studying at

college decreases at a time of economic crisis, characterized by high levels of youth

unemployment, thus decreasing the likelihood of students losing out on paid

employment.

9 There is a detailed analysis in Observatori del Sistema Universitari (nd)

9

During 2012-2013 we can clearly see two opposing effects on the total cost of a college

education: first, an increase in direct costs (tuition fees) which leads to a decrease in

the overall demand on places and second reduced indirect costs (increased

unemployment rates), which should lead to an increased pressure on university places.

The key question therefore is to determine the impact this has had on the total cost of

college education.

One way to infer whether the total cost of college education has increased would be to

check whether the number of students enrolled on university programs has risen.

According to the forecasts of the Ministry of Education, Culture and Sports a predicted

increase in numbers of 25,000 students for the 2012-2013 academic year (where in

2011-2012 there were 1,469,653 students enrolled). At this point it is important to

note that enrollment may not be the best indicator of the real demand for university

education, and the actual number of credits each student enrolls for would make a

much more appropriate indicator. However, this expected rise in student numbers

does not seem to correspond to the actual increase in credits which, according to

some universities, has in fact been lower than in the previous year. This figure is not

available at present but some information may corroborate this assumption10. Thus, by

way of example and without drawing any conclusions, on September 30th 2012 the

University of Valencia reported a drop of 46.03% in credits taken diploma courses , an

increase of 33.55% on undergraduate courses, a decrease of 23.06% on master’s

programs and also a decrease of 74.89% on doctorate programs. Given that diploma

courses are at present being phased out of Spanish university system while new

undergraduate degree courses are still being implemented as part of third level

education reforms, perhaps what could be of most interest in these data is that overall

we can see a decline of 6.21% in registered credits. If data were available it would be

interesting to study whether there is any relationship between the rise in tuition fees

and changes in the credits by region.

In a country like Spain, where grants and loans have little weight as explained in detail

below, low tuition fees have been chosen as a way of ensuring equal opportunities.

While it is true that the LOU put forward the idea that tuition should reflect part of the

cost of the service, no explicit way to do so was outlined. The Royal Decree-Law

14/2012, by making explicit that tuition fees must cover a certain percentage of the

cost of the service, changes the design of tuition fees as a mechanism to ensure equal

opportunities (equity) to a notion of tuition fees as a collecting mechanism (efficiency).

10 On December 3rd, 2012 the Valencian university chancellors at a press conference claimed that the

increase in tuition fees had reduced the number of credits enrolled between 5 and 10 percent on average in the Valencian Community (see news in El Pais Valencia, retrieved from http://ccaa.elpais.com/ccaa/2012/12/03/valencia/1354571815_986356.html)

10

From Table 1, it would appear that, at least in some regions of Spain, the purpose of

seeking or maintaining equal opportunities has prevailed over the idea of collecting.

Without doubt they should reconsider this approach in the near future in order to

comply with the new regulations.

So far Spain has been characterized by low tuition fees as well as the low percentage of

students who receive grants or any kind of financial aid. Using these two criteria, Spain

is located, in the ranking of OECD countries (OECD, 2012: p. 277), in the southwest

quadrant of Figure 1, next to countries such as France or Italy. After the increase in

tuition fees in 2012-2013, and future increases that will certainly occur in the coming

academic years, there is a reasonable doubt about the funding model (quadrant) to

which our country is heading. There seem to be two possibilities open to us: that

either the number of students with a grant or other financial support will increase

significantly as we approach an Anglo-Saxon funding model, or on the other hand that

more and more we resemble the Japanese model.

Figure 1. Financing Models of Tertiary-type A Education in OECD countries (academic year 2008-09).

Source: OCDE, Education at a Glance 2012, Figure B5.1, p. 272.

A comparison in grants and other financial aids in higher education between Spain and

OECD countries shows that the growth in the period 2004-2009 has been higher in

Spain, 175% compared to 107.1% in the OECD. But if we look at the percentages in

terms of GDP in the OECD, this was 0.29% in 2009 compared to 0.14% in 2004, while in

Spain it was 0.11% in 2009 and 0.04% in 2004. In Figure 2, taken from OECD (2012: p.

Australia

Austria

Belgium (Fr.)DenmarkFinlandFrance Iceland

Italy

Japan

Mexico

Netherlands

New Zealand

Spain

NorwaySweden

Switzerland

United Kingdom

United States

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

5.500

6.000

6.500

7.000

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Ave

rage

tu

itio

n fe

es c

har

ged

by

pu

blic

inst

itu

tio

ns,

firs

t d

egre

e p

rogr

amm

es,

in U

SD

% of students who benefit from public loans and/or scholarships/grants

11

276), we can see the little weight that public subsidies to higher education have in

Spain compared with other OECD countries.

On the other hand, total grants and state aid to higher education11 in year 2012-13 was

€1,235,426,941.4, compared to €1,117,119,019.4 for the previous year, that is to say

there was an increase of 10.6%, while the average increase in the price of tuition at

first enrollment (see Table 1) was 16.6%. A comparison in absolute values would give

us more information about how much students are overpaying (although this would

require knowing the number of credits enrolled, which is unavailable at the moment)

and how much is being spent on scholarships and grants, however, since these data

are not available, we have to resign ourselves to that approach in percentage terms.

In addition, information from the Ministry of Education shows that financial aid in

income contingent loans were eliminated this academic year, while during 2011-2012

they amounted to €30,525,607, benefiting 2,235 students. This finding goes against

the practice observed in other countries. Higher tuition fees, especially if they involve

major changes to the funding model, are usually accompanied by considerable grants

and by the introduction or increase in income contingent loans.

These numbers suggest that the funding model adopted by Spain is closer to the model

that represents Japan with high tuition fees and low financial aid for students.

Figure 2. Public aid to higher education as a percentage of total public expenditure on education, by type of aid and OECD (2009).

Source: OCDE, Education at a Glance 2012, Figure B5.3, p. 276.

11 Ministerio de Educación, Cultura y Deporte (nd), p. 41

0

5

10

15

20

25

30

35

40

45

50

55

60

Ch

ile

Den

mar

k

Slo

ven

ia

Ital

y

Slo

vak

Rep

ub

lic

Un

ited

Kin

gdo

m

Au

stri

a

Un

ited

Sta

tes

Fin

lan

d

Po

rtu

gal

Hu

nga

ry

New

Ze

alan

d

Bel

giu

m

Irel

and

Ger

man

y

No

rway

OEC

D a

vera

ge

Net

her

lan

ds

Au

stra

lia

Swed

en

Spai

n

Isra

el

Swit

zerl

and

Fran

ce

Bra

zil

Esto

nia

Can

ada

Mex

ico

Ko

rea

Cze

ch R

epu

blic

Ind

on

esia

Arg

enti

na

Po

lan

d

Jap

an

Icel

and

% o

f to

tal p

ub

lic e

xpen

dit

ure

on

ed

uca

tio

n

Scholarships/ other grants to households Transfers and payments to other private entities Student loans

12

5. Factors explaining the increase in tuition fees

We have analyzed the following relationships in order to try to understand the reasons

behind the decisions made by the Spanish regions when increasing public university

tuition fees.

A. The starting tuition fee level. Although a range for increase tuition fees has been

implemented in previous years in order to limit disparities between universities,

differences had been building between the autonomous regions of Spain (AR). We also

have to take into account the different year in which each regional government

became responsible for higher education, as well as the varying degrees of

experimentation that each region can offer through their Universities12. One would

expect that those who start from a lower tuition fee level could think that they have

more room to increase them. According to Figure 3, the reality contradicts this idea,

except for Canarias. For the rest of the AR two groups can be established: one where

tuition fees have increased very little (less than 10%), regardless of low or high starting

fees; and another group in which the higher the starting tuition fee, the higher the

increase (Castilla-La Mancha, Comunidad Valenciana, Castilla and León, Madrid and

Cataluña).

12 As stated in Ministerio de Educación, Cultura y Deporte (nd) p. 40

13

Figure 3. Average tuition fee for one credit in undergraduate degrees during 2011-2012 and its increase (over the previous year) during 2012-2013, by region.

Source: Ministerio de Educación, Cultura y Deporte: http://www.mecd.gob.es/educacion/universidades/estadisticas-informes/estadisticas/precios-publicos.html

B. The financial stress on regional governments. One would expect that the increase

in tuition fees might correspond directly to financial difficulties experienced within

each of the Spanish regions.

An approach to financial stress could be given by debt to GDP measured as a

percentage. In Figure 4 we can see that we have three groups: Those with a debt

below 15% and an increase in tuition fees below 10%, those with a debt level below

15% and a rise in tuition fees above 35% and those with debt above 15% in which

there is a certain positive relationship between debt and rising tuition fees.

AndalucíaAragón

Asturias

Balears

Canarias

Cantabria

Castilla y León

Castilla-La Mancha

Cataluña

Comunidad Valenciana

Extremadura Galicia

Madrid

Murcia

Navarra

País Vasco La Rioja0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

10 11 12 13 14 15 16 17 18 19 20 21

Incr

ease

ave

rage

tu

itio

n f

ee f

or

on

e cr

edit

in f

irst

en

rolle

d u

nd

ergr

adu

ate

deg

ree

s:

acad

emic

yea

r 2

01

2-2

013

(%)

Average tuition fee for one credit in first enrolled undergraduate degrees (euros): academic year 2011-2012

14

Figure 4. Average percentage increase in tuition fees for one credit, in first enrollment undergraduate degrees during 2012-2013 and Debt (as a % of GDP, II, 2012) by region.

Source: Estadísticas precios públicos universitarios Curso 2012-13 and Banco de España, Boletín Estadístico, April 2013.

A second approach to financial stress could be the increase of debt from one year to

another (the reference period used is the second quarter of each year). In Figure 5 we

see two groups: those that increase tuition fees below 10% and have a debt increase

ranging from 3 to 8 points; and those with a rise in tuition fees above 10%, so in this

group it would appear that in more indebted regions the increase in tuition fees is less

significant.

An

dal

ucí

aA

ragó

n

Asturias

Balears

Cantabria

Castilla y León

Castilla-La Mancha

Cataluña

Comunitat Valenciana

Extremadura Galicia

Murcia

Navarra

País Vasco

La R

ioja

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Incr

ease

ave

rage

tu

itio

n f

ee f

or

on

e cr

edit

in f

irst

en

rolle

d u

nd

ergr

adu

ate

deg

ree

s:

acad

emic

yea

r 2

01

2-2

013

(%)

Public debt ( % of GDP, II- 2012)

15

Figure 5. Average percentage increase in tuition fees for one credit, in first enrollment undergraduate degrees during 2012-2013 and public debt increase (as a % of GDP) between 2nd quarter 2011 and 2nd quarter 2012 (percentage points), by region.

Source: Estadísticas precios públicos universitarios Curso 2012-13 and Banco de España, Boletín Estadístico, April 2013.

The debt relief by an increase in tuition fees is certainly very small, although their

relative importance is increasing with the number of students and credits. Figure 6

shows two groups: those that have a tuition fee increase below 10%, with less than

35,000 students; and those whose tuition fees rise above 10%. In the latter case there

appears to be a positive relationship between the number of students and the tuition

fees increase, with the exception of Andalucía.

An

dal

ucí

a

Aragón

Asturias

Balears

Canarias

Cantabria

Castilla y León

Castilla-La Mancha

Cataluña

Comunitat Valenciana

Extremadura Galicia

Madrid

Murcia

Navarra

País

Vas

co

La Rioja0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Incr

ease

ave

rage

tu

itio

n f

ee f

or

on

e cr

edit

in f

irst

en

rolle

d u

nd

ergr

adu

ate

deg

ree

s:

acad

emic

yea

r 2

01

2-2

013

(%)

Increase of public debt as % of GDP between 2nd quarter 2011 and 2nd quarter 2012 (% points GDP)

16

Figure 6. Average percentage increase in tuition fees for one credit, in first enrollment undergraduate degrees during 2012-2013 and number of undergraduate students in 2011-2012, by region.

Source: Estadísticas precios públicos universitarios Curso 2012-13 and Datos y cifras del Sistema Universitario

Español Curso 2012-13.

C. Political criteria: efficiency versus equity. With the information of a single academic

year, 2012-2013, it is difficult to make any analysis of the influence of ideology in

decision making. Authors like Kauder and Potrafke (2013) have discussed this issue for

the German case, concluding that more left wing parties are more likely to decrease or

even eliminate tuition fees in higher education, while the attitude of the right wing

parties was the contrary.

Starting from this premise, we have collected the political sign of each regional

government by looking at the political party in power in Table 3. In all regions the

ruling party has a majority, except in Cataluña, where there is a power-sharing

coalition and in Extremadura, where there is de facto parliamentary support.

An

dal

ucí

a

Ara

gón

Asturias

Bal

ears

Canarias

Cantabria

Castilla y León

Castilla-La Mancha

Cataluña

Comunitat Valenciana

Extremadura Galicia

Madrid

Murcia

Navarra

País Vasco

La R

ioja

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

0 20.000 40.000 60.000 80.000 100.000 120.000 140.000 160.000 180.000 200.000 220.000 240.000

Incr

ease

ave

rage

tu

itio

n f

ee f

or

on

e cr

edit

in f

irst

en

rolle

d u

nd

ergr

adu

ate

deg

ree

s:

acad

emic

yea

r 2

01

2-2

013

(%)

Number of undergraduate students in academic year 2011-2012

17

Table 3. Political party ruling the Autonomous Community, year 2012

Asturias PSOE Galicia PP

Cantabria PP Murcia PP

País Vasco PNV La Rioja PP

Madrid PP Baleares PP

Cataluña CiU-ERC Aragón PP

C. Valenciana PP Canarias CC

Andalucía PSOE Navarra UPN

Castilla y León PP Extremadura PP-IU

Castilla-La Mancha PP

PP: Partido Popular PNV: Partido Nacionalista Vasco CiU: Convergència i Unió ERC: Esquerra Republicana de Catalunya

PSOE: Partido Socialista IU: Izquierda Unida CC: Coalición Canaria UPN: Unión del Pueblo Navarro

Source: Own elaboration

Asturias, Andalucía and Extremadura, with socialist governments in the first two cases

or presence of left wing IU in the parliamentary majority in the latter, are among the

regions where tuition fees have risen less dramatically. However, there are also other

regional governments run by the conservative Popular Party (PP) where fees have also

increased very little. In any case, it is noteworthy that in those regions of Spain run by

more left-wing administrations tuition fees have not been increased or only raised by a

small amount. This is true even in Andalucía where the number of students is

particularly large. However, as we said at the beginning of this section, it is difficult to

draw conclusions with the data of a single year.

D. Consistency between rising tuition fees and declining University transfers. The rise

in tuition fees for the year 2012-13 was outlined in the decrees published in the

relevant regional gazettes throughout the month of July 2012 (except on August 4th in

Murcia and September 7th in Rioja). At that time no region had a draft budget for 2013.

However, we assume that some estimation was done to determine the amount of

increase in tuition fees.

The analysis of the budgets for each of the Spanish regions, which are approved in late

2012, in regard to university education spending can indicate the thinking behind these

estimations.

Since we are living a tough economic period it is easy to confirm that all regions,

except one, adjusted their budgets downwards. Indeed Table 4 shows the general

decline of the total budget.

18

Table 4. Total public budget by regions in 2012 and 2013 (euro).

Autonomous Region

Total Budget

2012 2013 Variation 2012-13

Andalucía 32.020.075.716,00 30.706.702.826,00 -4,10%

Aragón 5.151.354.334,28 5.107.284.732,10 -0,86%

Asturias 4.133.493.862,00a 3.691.754.585,00 -10,69%

Baleares 3.674.902.322,00 3.574.246.871,00 -2,74%

Canarias 6.821.233.762,00 6.358.723.733,00 -6,78%

Cantabria 2.439.242.271,00 2.292.524.213,00 -6,01%

Castilla La Mancha 8.290.859.810,00 7.440.623.540,00 -10,26%

Castilla y León 8.802.077.467,00 9.481.615.087,00 7,72%

Cataluña 37.024.462.659,12 n.d.b

Extremadura 4.914.348.546,00 4.790.886.828,00 -2,51%

Galicia 9.557.520.302,00 9.137.091.569,00 -4,40%

Madrid 22.042.769.389,00 19.193.694.761,00 -12,93%

Murcia 4.836.081.364,00 4.476.265.764,00 -7,44%

Navarra 3.837.716.814,00 3.837.716.814,00c 0,00%

País Vasco 10.449.167.000,00 9.316.657.000,00 -10,84%

Rioja 1.260.495.360,00 1.222.380.713,00 -3,02%

Valencia 13.769.119.120,00 12.784.911.760,00 -7,15% a 2011 data 2011, 2012 is not available b Budget extension under discussion c 2013 data is 2012 extension Source: Own elaboration with data from Autonomous Communities web sites

If budget cuts were equal in all areas of spending, budget variation for university

education spending should match the total variation. Table 5 shows the information

regarding budget variation for spending on higher education and its comparison with

the total budget variation.

19

Table 5. Public budget for higher education by regions in 2012 and 2013 (euro).

Autonomous Region

Higher Education Total Budget

2012 2013 Variation 2012-13

Variation 2012-13

Andalucía 1.318.196.054,00 1.155.588.256,00 -12,34% -4,10%

Aragón 152.073.066,08 151.777.159,20 -0,19% -0,86%

Asturias 139.925.192,00a 128.071.611,00 -8,47% -10,69%

Baleares 61.490.790,00 57.327.549,00 -6,77% -2,74%

Canarias 228.696.301,00 209.612.293,00 -8,34% -6,78%

Cantabria 68.341.301,00 60.560.164,00 -11,39% -6,01%

Castilla La Mancha 113.675.930,00 117.763.130,00 3,60% -10,26%

Castilla y León 360.259.173,00 326.464.882,00 -9,38% 7,72%

Cataluña 757.131.907,39 n.d.b

Extremadura 102.478.068,00 95.886.391,00 -6,43% -2,51%

Galicia 342.826.994,00 320.631.835,00 -6,47% -4,40%

Madrid 1.028.758.649,00 863.015.043,00 -16,11% -12,93%

Murcia 199.178.958,00 174.612.953,00 -12,33% -7,44%

Navarra 65.301.436,00 57.361.766,00 -12,16% 0,00%

País Vasco 342.686.676,00 301.781.137,00 -11,94% -10,84%

Rioja 22.190.253,00 20.546.589,00 -7,41% -3,02%

Valencia 826.466.530,00 743.233.940,00 -10,07% -7,15% a 2011 data, 2012 is not available b Budget extension under discussion Source: Own elaboration with data from Autonomous Communities web sites

To the extent that both variations do not match, we want to emphasize how much

more (or how much less) the cost of higher education has decreased over the total

budgeted expenditure, what we call "corrected variation higher education spending"

and compare that result with the decision taken in relation to tuition fees. Table 6

shows the comparison.

20

Table 6. Variation higher education spending corrected for total expenditure and variation in tuition fees by regions, 2012-2013

COMUNITY

Corrected variation higher education spending

Variation in tuition fees

Andalucía -8,23% 2,38%

Aragón 0,66% 3,60%

Asturias 2,22% 0,00%

Baleares -4,03% 9,21%

Canarias -1,56% 42,11%

Cantabria -5,37% 3,60%

Castilla La Mancha 13,85% 20,33%

Castilla y León -17,10% 41,85%

Cataluña n.d. 66,67%

Extremadura -3,92% 1,91%

Galicia -2,08% 0,00%

Madrid -3,19% 38,09%

Murcia -4,89% 11,79%

Navarra -12,16% 4,00%

País Vasco -1,10% 2,00%

Rioja -4,38% 2,12%

Valencia -2,92% 33,34%

Source: Own elaboration with data from tables 1 and 5

We see that only two regions, Aragon and Asturias, decreased spending on college

education is less than the entire budget. Furthermore only one region, namely Castilla

and Leon, increased its total budget, calling our attention to the fact that in spite of

increasing the total budget by 7.72%, they decreased spending on higher education by

9.38%. The representation of Table 6 data in Figure 7 helps us to explain them.

21

Figure 7. Corrected variation higher education spending and undergraduate average tuition fees by region, 2012-13

Source: Estadísticas precios públicos universitarios, Academic year 2012-2013 and Banco de España, Boletín Estadístico, April 2013.

Figure 7 shows a certain tendency for most regions. Since all tuition fees increase (or

remain equal, as is the case in Asturias and Galicia), almost all budget spending on

higher education decreases (with the exception of Aragon, Asturias and Castilla-La

Mancha). Once again Castilla-Leon attracts our attention given that it is in the high

tuition fee increase range.

This trend suggests that regional governments worked on the expectation that

university resources would increase simply by increasing tuition fees, which in turn

would justify a reduction in the budget allocated to higher education.

However, further analyses are needed to confirm whether this forecast was indeed

correct. To perform this analysis we would need to examine the impact of the rise in

fees on demand; that is to say we need to know data on the number of credits

students have enrolled for.

6. Conclusions

According to the Royal Decree-Law 14/2012, Spanish autonomous regions have

increased university tuition fees for the academic year 2012-13. In this paper we have

analyzed various factors that may explain or provide a rationale for this decision. We

-20

-15

-10

-5

0

5

10

15

20

25

30

35

40

45

50Corrected public budgetexpenditure on universityeducation (% variation)

Average tuition fee for onecredit Variation averagetuition fee for one credit infirst enrolledundergraduate degrees(variation %)

Var

iati

on

(%

)

22

have analyzed four factors: the starting level of tuition fees, financial stress across

regions, political criteria and consistency between tuition fees increases and the

reduction in regional government funding for universities. While the first two aspects

appear to be less relevant, the second two could provide some understanding of the

difference in the decision making process across regions.

During 2012-2013 there were two events: an increase in university tuition fees and a

reduction in government spending on higher education. Both factors show a joint

rationale if the assumption that a rise in tuition costs would result in an increase in

resources for universities, thus compensating for the reduction in income from

government funding in the region.

The question that arises is whether or not there was an alternative plan if universities

experimented an income decrease in two ways: tuition fees and regional funding. And

undoubtedly the answer is yes. Royal Decree-Law 14/2012 also amends the teaching

hours of university professors in public universities established in Article 68 of the

Organic Law 6/2001 of Universities. This change represents a teaching capacity

increase that could reach 33% in some centers. Increasing teaching capacity has

enabled universities to reduce costs by not hiring teaching assistants. And if this was

not enough to balance the books, was there anything else planned? Again the answer

is yes: for those universities that have deficits, Royal Decree-Law 14/2012 announced

that for the following year these universities should make a reduction in spending

equal to the deficit incurred by the institution.

These changes point to a very important adjustment in the financing model for Spanish

university education: to link tuition fees to the cost of the service implies that tuition

fees differentiation is promoted, while college students and their families see how the

cost of studying at university increases for them.

What can we expect from universities? What are they going to do? We can expect

them to differentiate their product and adjust tuition fees, within the range

established, according to their quality. Although each autonomous region fixes their

own tuition fees, the fact is that the Royal Decree-Law 14/2012 has left open the

possibility of price differences between universities within the same region13, that is to

say tuition fees for the same degree can be different at each university within the

same region. This means that universities must differentiate themselves, not in the

degrees they offer but also for the prestige they have. If you set a tuition fee range

based on public service costs, institutions will be at the upper limit of this range only if

13 In fact, in 2012-13 Madrid set a lower limit for tuition fees for non-professionalizing university

master’s courses(€65/credit on first enrollment) and a maximum for undergraduate studies that

universities may fix . So far Madrid universities have agreed to charge the same tuition fees, but most likely these agreements are not feasible in the future.

23

their prestige guarantees a sufficient demand that does not threaten their existence,

something that will only occur if their quality is recognized by society at large.

This increased competition between centers and their differentiation is consistent with

the objective that some Spanish universities are placed at the top of the college

rankings (as produced by the Shanghai Jiao Tong University). It is very likely that the

differentiation of centers according to their prestige recommends a regrouping or

maybe a disappearance of some of them, at least within the same region.

Finally, we cannot fail to mention that the consequences of an increase in tuition fees,

when not accompanied by an improvement in aid to families through grants and loans

will have unexpected consequences. It may force Spain to return in some years to the

university of thirty years ago, where only those with sufficient resources could attend.

On a more positive note this may have resulted in some Spanish universities advancing

further up the international rankings.

24

References

Albert, C. and J.M. Roig (2011). La financiación de la educación superior. Lucía Navarro

(coord.) Lecturas sobre Economía de la Educación. Homenaje a María Jesús

San Segundo. Madrid: Ministerio de Educación

Barr, N. (2012). The economics of the welfare state. Oxford: Oxford University Press.

Carrasco Díaz, D., M.J. Morales Caparrós and D.Sánchez Toledano (nd). Experiencias de

implantación de modelos de contabilidad analítica en las universidades

españolas: planificación de los trabajos de personalización. Retrieved from

http://www.asepuc.org/banco/experiencias_de_implantaciOn_de_modelos_de

_contabilidad_analItica_en_las_universidades_pUblicas_espaNolas_planificaci

On_de_los_trabajos_de_personalizaciOn.pdf

Carrasco Díaz, D. (ponente)(2011). Libro Blanco de los costes en las universidades.

Madrid: Oficina de Cooperación Universitaria

Duch, N. (2009). Evolución de los precios públicos universitarios en España, in Informe

CyD 2008, Barcelona: Fundación CyD, p. 120-122. Retrieved from

http://www.fundacioncyd.org/informe-cyd/informe-cyd-2008

Hernández Armenteros, J. (2006). La contabilidad de costes en la universidad española

como herramienta de cambio en sus estructuras productivas y organizativas,

Auditoría Pública, nº 38, p. 85-98

Kauder, B. and N. Potrafke (2013). Government ideology and tuition fee policy:

evidence from the German States, CESifo working paper nº 4205, April

Lizcano Álvarez, J. (2012). El cálculo de costes en las universidades: Limitaciones y

comentarios metodológicos. Universidad de Valencia: Jornada sobre

Implantación de la Contabilidad Analítica en las Universidades Españolas.

Retrieved from

http://www.uv.es/uvweb/departament_comptabilitat/ca/departament-

comptabilitat/material-jornada-sobre-implantacion-contabilidad-analitica-

1285855402132/Novetat.html?id=1285865839170

Malles Fernández, E. and U. del Burgo García (2010). Los sistemas de información

contable en la gestión universitaria. Revista de Dirección y Administración de

Empresas, nº 17, diciembre, p. 119-140

Ministerio de Educación, Cultura y Deporte (nd). Datos y cifras del Sistema

Universitario Español. Curso 2012-2013. Retrieved from

http://www.mecd.gob.es/prensa-mecd/actualidad/2013/01/20130118-datos-

cifras.html

25

Observatori del Sistema Universitari (nd). Preus universitaris 2012-2013 a Catalunya i

a Espanya. Retrieved from http://www.observatoriuniversitari.org/

OECD (2012). Education at a Glance 2012. Paris: Organisation for Economic Co-

operation and Development. Retrieved from http://www.oecd-

ilibrary.org/content/book/eag-2012-en

Rodríguez Plaza, S. (2012). El modelo CANOA/Universidades: Características generales.

Personalización e Implantación: Problemas prácticos y resumen de la situación

actual. Universidad de Valencia: Jornada sobre Implantación de la Contabilidad

Analítica en las Universidades Españolas. Retrieved from

http://www.uv.es/uvweb/departament_comptabilitat/ca/departament-

comptabilitat/material-jornada-sobre-implantacion-contabilidad-analitica-

1285855402132/Novetat.html?id=1285865839170