Funding
State financing of education aims at creating equal learning opportunities for studying to all capable and motivated students and to ensure financial resources necessary for the educational institution.
In the academic year 2020/21, there were 18 educational institutions in Estonia providing study based on higher education curricula. Five of these are private schools, six state universities and seven state institutions of professional higher education.
Provision of education in universities and professional higher education institutions is funded from the state budget. The higher education institutions are financed from the state budget through activity support intended for covering study costs, administrative costs, investments and assigned operating costs. In addition, the budgets of higher education institutions include resources received from economic activities and domestic and foreign support; universities also profit from the provision of payable services related to their main activity and research and development.
The higher education reform, which entered into force in the autumn of the 2013/14 academic year, created an opportunity for all entrants to acquire free higher education. The decrease of paid study was offset by a 25% increase in funding. The changes in the funding system that accompanied the reform linked the funding of higher education institutions more clearly to the quality and effectiveness of education, taking into account the needs of society. From 2016 onwards, indicator-based (e.g., the number of admitted students and that of full-time students, the quality of provision of instruction, the number of graduates from a university and the number of graduates in broad groups of studies of national importance, specifications for provision of instruction according to curricula and broad groups of studies, etc.) financing is applied to the extent of up to 75 per cent. Financing reform was fully implemented in 2017 after four years of transfer period.
For allocation of activity support to universities, a contract under public law shall be entered into for three years between the university Rector and the Ministry of Education and Research. The contract shall specify the rights and obligations of the parties, liability and procedure for the allocation of activity support. For the performance of the contract under public law, a performance agreement shall be concluded each year as an annex to the contract under public law. The performance agreement sets out basic obligations arising from the mission, objectives and functions of a university and necessities of the state, including the obligations regarding the extent, quality and efficiency of provision of instruction at the level of higher education and the conditions of financing thereof; exceptions to the partial reimbursement of study costs; bases and volume of allocation of student scholarship fund; volume and financing of Doctoral studies; curricula on the basis of which a university is allowed to conduct only part-time study and activities of national importance supporting the provision of instruction at a university.
Performance agreements ensure a better possibility for specifying the areas of activity arising from the functions of the higher education institutions, enable to decrease the unreasonable duplication through the effect of financing indicators and support the areas of development of national importance. In addition, other criteria characteristic of competitive higher education can be taken into consideration – to assess the internationalisation of universities, support services for students, cooperation with business sector and development of common curricula and to allocate funds on the basis thereof.
Higher education institutions are, to a small extent, financed from the budgets of local governments. Higher education schools may accept donations, scholarships, etc. as well as financing from third persons (entrepreneurs, graduates, etc.).
Financial Autonomy and Control
Upon implementing the activity support system, the notion of state-commissioned education in higher education and the complicated mechanism of coefficients and base costs forming the basis of the former were dropped. Financing was no longer linked to quality accreditation conditions. Since 2012, quality assessment has been based on the system which gives the right to provide instruction to only those institutions that have positively passed the assessment of groups of curricula.
Performance agreements ensure the financial autonomy of universities and higher education institutions understand the preparation of budgets. Educational institutions have extensive autonomy in managing their funds, staff, land and buildings.
The head of a higher education institution has the primary responsibility for finances. Supervision is exercised pursuant to the procedure established at the state level. According to the Accounting Act, supervision is exercised by audit companies and the National Audit Office of Estonia is the supreme body supervising the use of public money.
Fees within Public Higher Education
Since 2013, studying at all universities in public law and state institutions of professional higher education in private law is free of charge for students who study full-time following a curriculum (the curriculum is cumulatively completed in the amount of at least 75%), the language of instruction of which is Estonian and who has by the starting semester cumulatively completed the study load subject to completion under the curriculum in the previous semesters (30 European Credit Transfer and Accumulation System credit points in a semester, 60 credit points in a year). Thus, from the second semester, the reimbursement of study costs depends on the volume of completed curriculum. The Government of the Republic of Estonia establishes upper limits to the partial reimbursement of study costs per credit point, on the basis of which a higher education institution establishes the procedure and rates for a specific partial reimbursement of study costs (since the academic year 2013/14, it is 50 euros per one credit point; with certain curricula, the rate of reimbursement is higher – in the field of study of arts, 100 euros, in medical training, dentistry training and veterinary training, 100 euros, and with aircraft pilot curriculum, 120 euros per credit point).
An educational institution may demand reimbursement of study costs from a student who studies part-time (curriculum is cumulatively completed to the extent of 50-75%) or who follows a curriculum, the language of instruction of which is other than Estonian or who has been deleted from the matriculation register and matriculated again at the same curriculum within two years. A student who has studied within the state-commissioned education and completed at least one half of the standard period of a curriculum can start studies at the same academic level without reimbursement of study costs within a period equal to three times the standard period of the curriculum.
In general, the state does not allocate activity support to private higher education schools. Therefore, students studying in private higher education schools shall pay the tuition by themselves. Private educational institutions are free in establishing the volume of training services.
Financial Support for Learners' Families
Permanent residents of Estonia may deduct training expenses from their taxable income. If a learner him- or herself has no taxable income, the parents of a student of less than 26 years of age can deduct the costs from their taxable income.
Financial Support for Learners
Needs-based study allowance
Since the academic year 2013/14, need-based study allowance has been granted to a student who is an Estonian citizen or is staying in Estonia on the basis of a long-term or temporary residence permit or on the basis of a permanent or temporary right of residence in order to cover expenses related to the acquisition of education. In addition, students can also apply for state guaranteed study loan.
Need-based allowance is granted to a student
- who studies full-time and has by the starting semester cumulatively completed at least 75% of the study load subject to completion under the curriculum in the previous semesters or studies full-time in the first semester;
- whose family's monthly income per family member is up to 569 euros.
Need-based allowance is related to the size of the family of a 24-year-old student and the average income per family member. The family members of a student are deemed to be his or her parents, sisters and brothers, half-sisters and half-brothers in case the student is not married or a parent or a guardian of a child; the spouse of the student and/or a minor child whose parent or guardian the student is. The maximum average income calculated for the receipt of the need-based study allowance of students and the amount of study allowance are established by the State Budget Act of the respective year. In 2021, the maximum average income was 569 euros and the amounts of study allowance were as follows. If the average income per family member is up to 142.26 euros, the size of study allowance is 220 euros. If the average income per family member is between 142.26−284.50 euros, the size of allowance is 135 euros and the average income per family member of 284.51−569 euros ensures an allowance of 75 euros.
Doctoral allowance
A Doctoral candidate is entitled to apply for a doctoral allowance if the candidate is an Estonian citizen or resides in Estonia on the basis of a permanent or temporary residence permit, and if
- he or she is enrolled in full-time Doctoral study or part-time Doctoral study in case the reimbursement of study costs is not demanded from him or her;
- he or she has passed evaluation under the conditions and pursuant to the procedure established by the university or is a first-year doctoral candidate;
- he or she has not exceeded the nominal period of studies according to the curriculum.
The size of allowance is established by the state budget and in 2021, it was 660 euros per calendar month, paid for 12 months a year. The study support funds are allocated to an educational institution from the state budget through the budget of the Ministry of Education and Research.
Students who are on academic leave do not have the right to receive a study allowance.
Learning mobility funding
Estonia has undertaken to create additional possibilities for supporting the studies abroad of students and individual development of the academic staff of higher education schools. In 2003, the Ministry of Education and Research, in cooperation with Archimedes Foundation, launched the scholarship programme Kristjan Jaak, the objective of which is to support the studies of students of Estonian higher education schools enrolled in Master’s or Doctoral study at foreign universities and assignments abroad of students and teaching staff related to study and research. In 2009, the possibilities for studying abroad expanded even further due to the programme DoRa funded from the Social Fund. The programme DoRa supports study migration of teaching staff, study and research of Master’s candidates and Doctoral candidates in foreign universities and their participation in a professional conference, seminar or course taking place abroad.
Study loan
Both students studying at universities in public law and those studying at universities in private law who are enrolled in part- or full-time study and work as teachers and participate in part-time teacher training programmes have the right to obtain a study loan. The students who comply with the requirements can apply for a study loan to the extent that corresponds to the nominal period of studies of the course to the extent of a maximum rate per year. In the academic year 2021/22, study loan is capped at 1,250 euros where the duration of the borrower’s studies established by the curriculum is six to eight calendar months, and 2,500 euros where the duration of studies established by the curriculum is nine or more calendar months.
Study loan is granted by credit institutions. The government secures the institution granting the loan the interest and the principal amount of the loan in case of insolvency of the recipient. In order to apply for a loan, a student is required to provide a guarantee or find a surety. The interest rate applied to loans is commercial interest rate, which is established by law but shall not be less than 5 per cent per year. At the same time, the interest rate payable by students is fixed as 5 per cent. If the actual interest rate exceeds the fixed interest rate, the government shall compensate for the difference.
The repayment of a loan commences 12 months after finishing or interruption of studies. Under certain conditions, repayment of a loan is suspended – e.g., for parents of children up to 3 years of age or for the period of obligatory military service. During these periods, the central government shall pay interest payable on the balance outstanding on the amount of the study loan balance of the recipient of the loan.
Other services
Need-based study allowance does not cover all costs related to studying, such as expenses on study materials or subsistence expenses. Most of higher education schools offer students dormitory places that are cheaper than rental apartments offered at the real estate market. Library services are also available.
Private Higher Education
In 2020/21, from the 18 higher education institutions, 5 were private schools, one of them a university. Private schools and the students studying at private schools can be funded from the state budget on the same grounds as state higher education institutions and universities in public law. A private school can apply for activity support and if the allocation of activity support is considered of national importance, the expenses of the private school related to the provision of instruction at the level of higher education in the framework of the according curriculum are covered to the extent of the activity support on the basis, conditions and in accordance with the procedure applicable to state professional higher education schools and public universities provided for in the legislation.