By Dana Sookdeo
An economy is only as strong as its human capital base. The correlation between an educated society and economic prosperity has always been positive and high, and has driven most countries to place investment in education at the forefront. Trinidad and Tobago has been no exception to this, as education has often received one of the largest budgetary allocations. However, in a climate which bears a pandemic that has created catastrophic economic fallouts, and in a country that has been facing an ongoing economic recession and persistent fiscal deficits (since 2009), it may come as no surprise that austerity measures are now needed to be enforced. The Government Funded Tertiary Assistance Program (GATE) was first implemented in 2004 when it replaced the then ‘Dollar for Dollar’ program with the purpose of enriching the human capital base of the country, allowing all citizens to have fair and equal access to tertiary education. However, what seemed like the perfect solution, is now slowly turning into the perfect storm due to years of mismanagement and unsustainability of the system. This has resulted in the Government taking the decision to reduce expenditure on the program which has many implications to the citizens of Trinidad and Tobago. This article briefly explores the inefficiencies that have existed in the GATE system, some of the recent implications of the cut in expenditure on GATE and some suggestions on how we can improve the entire system.
The Inefficiencies of GATE
The implications of cutting expenditure on GATE has caused chaos among the citizenry, in particular, those families who are beneficiaries of the GATE program. However, what must be understood, is that while GATE has undoubtedly benefited many citizens and tremendously helped increase the attainment of tertiary education, the program has not largely benefited the target group most in need, i.e., low income households, resulting in it being an abused and wasted resource. While there was the process of means testing to determine how much funding would be allocated to each individual when GATE was first implemented, data from the Trinidad and Tobago Household Budget Survey 2008/2009 made it clear that GATE was mostly accessed by higher income households who could have afforded the tuition. This highlights the first inefficiency of the system as the program now beared the burden of unnecessary expenses, while the low income households, i.e, the households which needed the funding, were still not attaining tertiary level education (perhaps due to cultural factors amongst others). The situation of wasted resources was then further exacerbated during the period when the Government allowed one hundred percent funding of GATE to all students.
Eventually the means test was re-implemented, and there was still the need to efficiently incorporate the low income households (earning less than $9,000 per month) into tertiary level education. This brings into question whether the system was efficient in addressing the inequality of access to tertiary level education among income groups in the presence of subsidized education. Therefore, it is becoming clear that more research into the underlying reasons of inequality in access to education is necessary if the Government of Trinidad and Tobago is to efficiently address this problem.
Secondly, education in a small island developing state is critical for its economic and social progress and whilst the GATE program made great strides in moving the island closer to development,it resulted in thousands of university graduates facing limited job opportunities and an unbalanced labour market. This left many graduates unemployed or underemployed, which ultimately worsened the problem of the brain drain. So, we then relied on the education system to create entrepreneurial individuals, which required creative and critical thinking. However, short falls of the education system have left students simply regurgitating and replicating information to examinations, and this is just one factor that has stifled the critical and creative thinking that is needed to generate successful entrepreneurship (Edwards 2007). Even though entrupernship may have increased over time, it has not increased in the necessary areas for sustainable development, earning foreign revenue and concrete job creation.
Furthermore, when examining the trend in the allocation of funding to the GATE program, it was observed that funding was exponentially increasing over time, jumping from TT$102 million in 2004/2005 to TT$625 million 2010/2011 and then to TT$650m in 2016. These high figures which bloated the transfers and subsidies payment of the Government, has never been the answer to an inefficient system. The problem did not reside in how much money was allocated, but the actual GATE funding formula that was unsustainable and wasteful from the beginning.
The phrase “increasing income is not enough” can be thought of and applied to this situation. Over time, the adjustments to the GATE program have focused on either increasing or decreasing expenditure. However, in order to fix the inefficiencies that exist in the system, there are a number of other things that can be done apart from simply adjusting allocations.
Recent adjustments made to GATE
- Funding for Postgraduate programs are now discontinued from August 2021.
- Where the household income is above $30,000 per month but less than $75,000 per month, students will be eligible for 50% GATE funding for tuition fees.
- Where the household income is above $75,000 per month, students will be ineligible for GATE funding.
- There will now be mandatory income-only means testing for all students who are accessing the GATE service from 2021.
The Implications of the GATE adjustment
Given that the economy is currently facing an economic downturn and expenditure is being reduced, the Minister of Education believes that the adjustments made to the GATE program would be more equitable.
“The adjustments [to GATE] would allow for greater equity in the distribution of precious resources, given current financial constraints, and will focus assistance where it’s most needed.” – Education Minister, Dr Nyan Gadsby Dolly.
While this can be argued for and can be effective, the other implications of the adjustment of the GATE program are multidimensional. Not only are the implications experienced on an individual basis, but the wider society and the economy will also be impacted.
Firstly, curtailing expenditure altogether on post graduate programs has the potential to widen the inequality in access to education, since only the wealthier citizens will now have access to postgraduate studies. In the current economic climate, graduates are facing the severe issue of unemployment due to the glut of skilled labour in the labour market. Post graduate studies is therefore the avenue a large number of students take in order to increase their chances of employment. With the help of the GATE program, many students were able to secure a masters/mphil/doctorate in their field of study and were then able to expand their knowledge and skill set, and secure a job.
However, on the flip side, the large glut of graduates has created an imbalance in the labour market and due to a highly educated population, thus resulting in many graduates becoming unemployed or even underemployed. On a purely economic basis, with less employees being able to secure a post graduate degree, the labour market can potentially rebalance in the long run, ceteris paribus. However it must be noted that the benefit of this is still less than the cost of an uneducated human capital base and high youth unemployment. What therefore needs to be done is placing focus on the creation of policies to expand the labour market, employment opportunities and entrepreneurial skills, which would later be discussed.
Secondly, the removal of funding for postgraduate programs also has the potential to psychologically affect those students who have set out to pursue a postgraduate degree with the reliance on GATE funding. Students may now face limited employment opportunities upon graduation and be unable to fund their post graduate studies to gain a chance of employment, which can negatively impact their mental health.
What must also be considered is the impacts of COVID-19 on the individual incomes of citizens. While the government has implemented mandatory means testing for students accessing the service, the amount allocated to each student may not be sufficient, given that the liveable wage has changed during the COVID-19 pandemic. With the changes implemented in the 2020/2021 budget, citizens will now face extra costs such as property tax and potentially higher costs on gas from 2021. There has also been demand pull and cost push inflation occurring, and other financial and social factors that have increased the standard of living among citizens. Therefore, it is imperative that this be taken into consideration when allocating funding to students.
Improving GATE: Restructuring the inefficiencies in GATE
Beyond the inefficiencies mentioned above, there exists a number of problems that once addressed, can contribute to a much more effective system.
- Governance of GATE: By reforming policies to be more inclusive, performance based and industry relevant, the governance of GATE can be improved significantly. There is also the need to upgrade technologies to provide real time student and tertiary level institution information.
- Alignment of GATE with the non-booming tradable sectors: There lies a huge gap in the economic strategy of the country and the education system. In a post COVID-19 economy, where economic diversification is critical, it is imperative that the Government takes into account the development and growth needs of the country, and aligns it with the education system. This can be done by providing incentives to tertiary level institutions for the creation of programs in line with the labour needs of the country. Not only would this incentivize students to pursue these programs, but this would aid in creating sustainable employment opportunities for the youth.
- Providing increased support to technical vocational skills: Studies have shown that the lower income class has often opted to educate themselves via technical vocational skills programs rather than engage in university programs. Based on the fact that this is the income group which needs the most assistance, this support is critical in this area.
- A proper focus on entrepreneurship: The expansion of GATE over time has resulted in a surplus of skilled graduates who became unemployed or underemployed upon graduating due to limited employment opportunities. There is therefore the need to encourage tertiary level institutions to design entrepreneurial universities, incentivized by GATE. However, it should be noted that the type of entrepreneurship that is encouraged should be in line with the diversification needs of the economy in areas such as agriculture and tourism. This focus on entrepreneurship will be greatly assisted by making improvements in the ease of doing business ranking.
- Income Contingent Loans: The income contingent loan is one in which each individual is able to receive free tertiary education and upon receiving a job and earning a certain salary, they begin to repay the full amount or even a portion of the Government funded tuition. This system is similar to the student loan system, except the individual will not have to begin repaying a portion of the tuition until their salary is above a certain income bracket.
So, were these measures the right move now? In a COVID-19 economy where many are being plunged back into poverty, losing jobs and facing economic hardship, education is one of the main factors that should be emphasized and encouraged.
There should be a focus on making the GATE program more equitable, and also a great need for focusing on policies geared towards job creation to facilitate graduates, alignment of GATE with the non-booming tradable sectors, increased support for technical vocational skills, entrepreneurship and income contingent loans, amongst others, to improve the system. Since, developmental deficits are welcomed, and in some cases, necessary in these situations, in order to ensure that national development does not suffer at the expense of fiscal consolidation. So, whilst cutting expenditure is a tool that is effective in an economic downturn due to scarce resources, no other investment yields a greater return than an investment in education.
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Franklin, Martin, et al. Avoiding Vertical Inefficiencies in Funding Tertiary Level Education (TLE) in Resource Abundant States. Jan. 2012.
McLeod, Sheri-Kae. “Trinidad & Tobago Government Announces Drastic Changes to National Scholarships.” Caribbean News, 16 Nov. 2020, http://www.caribbeannationalweekly.com/caribbean-breaking-news-featured/trinidad-tobago-government-announces-drastic-changes-to-national-scholarships/. Accessed 26 Nov. 2020.
Republic of Trinidad and Tobago Central Statistical Office 2008/09 Household budget Survey Household Questionnaire From To Part Number Questionnaire Number Name of Respondent Address of Respondent Telephone Date of Completion of Questionnaire. 2008.
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