Affordability of Private Tertiary Education in Malaysia by Samuel Jebaraj Benjamin, M. Srikamaladevi Marathamuthu (2011)

International Journal of Social Economics
Affordability of private tertiary education: a Malaysian study

Samuel Jebaraj Benjamin, M. Srikamaladevi Marathamuthu, Saravanan Muthaiyah, Murali Raman,
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Samuel Jebaraj Benjamin, M. Srikamaladevi Marathamuthu, Saravanan Muthaiyah, Murali Raman, (2011)
"Affordability of private tertiary education: a Malaysian study", International Journal of Social Economics,
Vol. 38 Issue: 4, pp.382-406, https://doi.org/10.1108/03068291111112068
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IJSE
38,4 Affordability of private tertiary
education: a Malaysian study
Samuel Jebaraj Benjamin, M. Srikamaladevi Marathamuthu,
382 Saravanan Muthaiyah and Murali Raman
Faculty of Management, Multimedia University, Cyberjaya, Malaysia
Abstract
Purpose – The purpose of this paper is to examine the affordability of private tertiary education for
households in Malaysia.
Design/methodology/approach – The relevant literature is reviewed to provide an overview of the

affordability of private tertiary education. Data are obtained randomly from a private university in
Malaysia and the results are analyzed using the one-sample t-test and one-way ANOVA.
Findings – The proxy of affordability, which is the average household income, reveals the per capita
average is more than three times the national average, which points out the non-affordability of students
from low and average earning households to afford private tertiary education in Malaysia. Financial
assistance of students at the tertiary level is insufficient and may warrant further policy and
administrative improvements to reach deserving students. There is also difference in income and hence
affordability between urban-rural households, a perspective that demands changes in the current
income distribution policies. In order to address the issues highlighted in this study, salient suggestions
have been proposed.
Originality/value – This paper reinforces the need to address the issue of affordability of tertiary
education and its significant importance, especially to developing countries.
Keywords Malaysia, Tertiary education, Private education
Paper type Research paper
1. Introduction
Based on the work of Schultz (1971), Sakamota and Powers (1995), Psacharopoulos and
Woodhall (1997), the theoretical framework that has been responsible for the adoption of
education and development polices has been coined as human capital theory. The
provision of formal education is viewed as a productive investment in human capital
(Olaniyan and Okemakinde, 2008). Among economists, there is a general consensus that
human capital plays a substantial role in achieving higher economic growth and
increased labor productivity for a country. The human capital approach arose from an
acknowledgment that an individual, firm or nation’s decision to invest in human capital
is similar to any other investment. This investment involve initial cost like tuition fees
and foregone earnings while at school which the individual, firm or nation hopes to
obtain a return in the future through increased earnings and productivity. New growth
theories have also identified the paths through which economic growth occurs and how
the government and the private sector investments can stimulate the flow of these
various capitals – namely physical capital, human capital, technological know-how and
International Journal of Social knowledge capital. According to the new growth theories, the spillover effect of
Economics education is at the heart self-sustaining growth for economies (Blundell et al., 1999).
Vol. 38 No. 4, 2011
pp. 382-406 The human capital can exert a sustained and positive effect on the long-term growth
q Emerald Group Publishing Limited of the economy (Rebelo, 1991). For instance, Barro (1991) and Barro and Lee (1994) in
0306-8293
DOI 10.1108/03068291111112068 their seminal work indicated the importance of human capital as a major determinant
of economic growth and productivity in a global environment. Valadkhani (2003) also Private tertiary
found that long-term policies aimed at accelerating the various types of investment in education
human capital would invariably improve labor productivity.
Studies in Australia for example had established that higher productivity translates
directly into higher per capita income and for Malaysia, this means that Malaysians as a
whole would benefit from higher standards of health care, education, and public welfare.
In their recent study, Chou (2003, p. 397) found that 42 percent of Australian growth 383
between 1960 and 2000 is attributable to the rise in educational attainment. As such, in
the Malaysian context, it becomes critical to monitor the cost and affordability of
education through time to all groups of its population as the graduate workforce could
expect higher earning capacity and income prospects in the future and contribute to the
sustainable development of Malaysia. Even in the USA, the world’s richest economy,
education is the number two priority for national agenda according to a recent survey
done (Hart and Teeter, 2003).
2. Education and cost

The role of tertiary education in meeting a nation’s human resource needs for socioeconomic
development is undeniable (Lindong, 2007; Aafaq, 2007). Higher education or tertiary
education is defined as courses that lead to degrees, higher degrees, and post graduates
diplomas (Gupta, 2008; Middlehurst and Woodfield, 2004, p. 8). The number of tertiary
students worldwide doubled in just over 20 years from 40 million in 1975 to more than
80 million in 1995 (The World Bank, 2000) and is expected to grow to more than 150 million
by 2025 (West, 1997). This trend is more apparent in certain developing countries especially
South East Asia and Latin America. Malaysia is one of the countries in South East Asia.
It has also been reported that many countries are unable to meet the growing demand for
higher education (Marjik, 2003). Higher education in Malaysia remains to be a key factor in
the development of the nation. There is a need to satisfy the demand for the higher
education and providing access to higher education to all Malaysians (Yahaya and
Abdullah, 2003). In realizing this demand, the Malaysian Government rightfully detailed its
four main challenges with respect to higher education in the Seventh and Eighth Malaysia
Master Plan. The first challenge identified was the increasing of access to higher education
and maintain standards (UNESCO, 2006). The enrollment rates in the public tertiary
educations institutions have been increasing since 2000.
Accordingly, the rapid demand for higher education has made it difficult for any
country to fulfill the aspirations of students and their families (Karmokolias and Maas,
1997). The increase in demand for higher education and its rising costs has caused the
public sector to either be unwilling or unable to accommodate this demand, both in
developing and developed countries (Patrinos, 2000). This phenomenon has resulted in a
“crisis of affordability” (Morgan-Klein and Murphy, 2002, p. 64). Access and affordability
to higher education therefore remains of the most divisive issues and challenges in
Malaysian higher education (Hassan, 2002). Many students in Malaysia are unable to
find a place in the public tertiary education institutions because of the limited places
available. At this juncture, the important role of the private tertiary education
institutions in increasing access to higher education must be recognized, (UNESCO, 2006;
Altbach, 2004; Hauptman, 2003; Morgan-Klein and Murphy, 2002). Private tertiary
education implies the application of market principles in the operation and management
of these institutions who may or may not receive financial support from the government.
IJSE The objectives, functioning, funding and modus operandi of private tertiary education
38,4 may differ from public tertiary education institutions (Gupta, 2008). At present,
30 percent of 17-23 age cohorts enroll in tertiary education in Malaysia and the
government has set an enrollment rate of 40 percent by 2010. Furthermore, the Ministry
of Higher Education has set a target of 1.6 million places in tertiary education by 2010.
However, the heavy responsibility placed on private tertiary education institutions to
384 meet the education demands of Malaysia could be seriously hampered by the affordability
of private tertiary education. Malaysia is one of the few countries that had allowed private
tertiary education long ago without granting it a full status (Lee and Levy, 2003).
And unlike public tertiary education institutions, private tertiary education institutions
are profit oriented and fees are charged for cost recovery and approximately five to
ten time higher than public institutions, (Sivalingam, 2006; Sirat, 2005). The problems on
affordability of private tertiary education have prompted some governments, for example
the Indian Government to initiate drastic measures to contain this problem. The practice
by many private institutions in India who charge a huge capitation fees or admission fees
which is beyond the reach of average middle class families forced the Supreme Court to
ban capitation fees in 1992 and places a ceiling on the fees to be charged by private tertiary
education institutions (Gupta, 2008). In this regard, it is imperative to determine if low and
middle families could afford to send their children to private tertiary education
institutions in Malaysia. The non-affordability of low- and middle-income families for
private tertiary education could have serious repercussion on the efforts of the
government to ensure tertiary education is affordable to households or families from all
income groups. If it is found to be true that private tertiary education is not affordable for
low- and middle-income families, current policies and practices needs to be re-examined
and improved. However, research on the affordability of private tertiary education in
Malaysia is sparse and perhaps this study is one of the few to specifically delve into this
problem.
Empirical findings on the affordability of private tertiary education could provide
more objective information to policymakers to confront many of the important and
pressing questions in this domain. Among the pertinent questions mentioned above are:
.
Is there a case for increased public support for private tertiary education?
.
Should there be cost sharing among the government, market and household sectors
or should the private sector be allowed to shift the burden on the household?
.
Should the government be allowed to shun its responsibilities towards private
tertiary education?
. Can private tertiary education institutes maintain its elitist nature and yet
enhance accessibility and affordability?
.
Should the private tertiary education institutions be legally allowed to reap profits?
3. Literature review
The significance of tertiary education to the nation’s well-being is acknowledged by all
countries (Centre for Policy Studies, 2005). In this regard, affordability of tertiary
education to people from all backgrounds prevails as an issue that confronts governments
all over the world (Akinkugbe, 2000). Even in the USA, the most developed nation in the
world, access to tertiary education has been found to be denied to students from lower
income families (Committee on Affordability, 2003). The rapidly increasing cost of public
higher education combined with the decreasing availability of financial aid grants in Private tertiary
Massachusetts has led to less education access for students and thereby undermining the education
economic development (Public Higher Education Network of Massachusetts, 2007). Also
in Massachusetts, USA, tuition and other fees have increased much faster than cost of
other goods over a ten years period up to 2007 (Public Higher Education Network of
Massachusetts, 2007). Such trends are likely to continue in the future, and perhaps even
accelerate. These developments appear to pose potentially adverse impacts on human 385
capital investment and in turn, on economic growth and labor productivity.
In the UK, although the agenda to widen the participation of lower socio-economic
groups in tertiary education has been around for more than half a century, the
participation by this group still does not match that of their higher social group
counterparts (Bowers-Brown, 2006). As such, the question of the cost, accessibility and
the affordability of tertiary education to the average and low-earning groups are crucial
as it is instrumental for Malaysia to achieve its human capital goals. Empirical studies on
the full extent of problems confounding governments and households from developing
countries on the affordability and accessibility of tertiary education is still lacking as
studies on this subject have been widely concentrated in developed economies.
Usher and Cervenan (2005) studied the affordability and accessibility of higher
education among 13 countries which are developed: Australia, Austria, Belgium, Canada,
Finland, Germany, Ireland, Italy, The Netherlands, New Zealand, Sweden, the UK and the
USA. They found Sweden, Finland and The Netherlands topped the list for affordability,
respectively, while The Netherlands, Finland and the UK topped the list for accessibility.
Their study concluded that Finland and The Netherlands are the success stories on both
areas tested that is on affordability and accessibility, because of high attainment rates,
extensive grant programs and student bodies that are reflective of broader society.
The question of accessibility and affordability of tertiary education in Latin
American countries (LAC), which are considered developing countries, compelled
(Murakami and Blom, 2008) to study Brazil, Colombia, Mexico and Peru. The main
findings of the study were:
(1) Affordability of tertiary education in LAC is low compared to high-income
countries, education costs and living costs are twice as high in the LAC compared
to high-income countries.
(2) Living costs are significant cost of tertiary education.
(3) There is relatively low level of student assistance in LAC.
(4) Overall, the average family in Latin America pays the equivalent of 60 percent
of GDP per capita for tertiary education.
Labor-intensive service sector like education is bound to increase in relative price as the
country grows (Baumol and Towse, 1997). Very few specific studies has been in done in
Malaysia to determine the rise of education cost over the years or the percentage of
household income spent on education. However, studies done in other countries on the
affordability of private tertiary education, both developing and developed would
provide an indication of this issue. Gundlach and Wossmann (2001) in their study
examined changes in the productivity of schooling for six East Asian countries and
concluded that the cost of schooling rose more than the cost of other labor-intensive
services in the period 1980 to 1994.
IJSE 4. Education and affordability
38,4 Household income and affordability
Studies have indicated that significant relationship exists between parental income and
type of school attended by students. In Malaysia, 61 percent of students who attended
government schools come from households in the lowest income quartile and only
26 percent from this lowest quartile attend private school (Economic Planning Unit
386 (EPU) and The World Bank, 2007).
In studies on affordability of education, household income is one of the yardsticks
used to measure affordability (Centre for Policy Studies, 2005; Usher and Cervenan,
2005; Hill and Winston, 2006). For this particular study on Malaysia, the gross domestic
product (GDP) per capita is chosen as the measure to compare with household income.
Although GDP per capita does not measure household income well, it nevertheless has
the benefit of being a recognized measure of relative national purchasing power that has
been used in number of studies (Usher and Cervenan, 2005).

Malaysia’s GDP per capita stood at RM 22,000 (US$6,452) in the year 2007
(Government of Malaysia, 2007b, c, d). The International Monetary and The World Bank
ranked Malaysia’s GDP (nominal) per capita out of a list of 170 countries at the 63rd and
54th at US$6,948 and US$6,807, respectively, in the year 2007.
Tertiary education in Malaysia is a fast-growing sector of the economy with the
proposed national budget allocation of 2009 reaching RM14.1 billion (Government of
Malaysia, 2009) and in 2007 representing approximately 5 percent of the county’s GDP
(UNESCO, 2008). Meanwhile, the expenditure on tertiary education as a percentage of
GDP in 2005 stood at 2.7 percent (OECD, 2005). Despite being a growth area of economy,
the affordability of private tertiary education is a major burden facing households in
Malaysia as any other developing countries.
Table I shows the number of public tertiary education institutions in Malaysia stood
at 18 while the number of private tertiary education institutions stood at 507 in the year
2007. In terms of student intake, the public intuitions had a total of 177,976 students in
2007 as compared to 167,788 for private institutions (Government of Malaysia, 2008a, b).
It can be clearly seen that the private tertiary education supported almost half of the
country’s higher education needs and the trend is expected to continue.
Tuition fees charged by private tertiary institution is six to ten times more than the fees
charged by public tertiary institution of higher learning (Government of Malaysia, 2008a;
Economic Planning Unit (EPU) and The World Bank, 2007). Since public universities
charge relatively low fees in Malaysia, it was reported that there is a risk of growing gap
between students who can afford to pay and enter into the private tertiary education
2002 2007
Public tertiary education institutions

No. of institutions 11 18
No. of students 96,863 177,976
Private tertiary education institutions
Table I. No. of institutions 523 507
General information on No. of students 165,763 167,788
the tertiary education
institutions in Malaysia Source: Government of Malaysia (2008a)
system and those who could not (Economic Planning Unit (EPU) and The World Bank, Private tertiary
2007). Murakami and Blom (2008) reported a marked difference between public and education
private sector tertiary education costs in their study of four Latin America countries.
Tuition fees as a percentage of GDP per capita was 1 and 26 percent for public and private
tertiary education institutions, respectively, in Mexico while 0 and 98 percent of the same
measure for public and private tertiary education institutions, respectively, in Peru.
In Malaysia, even for the public tertiary education institutions which are considered 387
affordable for students, it has reported that there is an insufficient level of contribution
from the beneficiaries, including the government and only a minority of students gain
access to such tertiary education which provides them with access to higher income
occupations and status (Centre for Policy Studies, 2005).
Over the period 1992-2001, while the average share of government educational
expenses in GDP was around 4.8 percent, the share of total expenses (both private and
government) in GDP was 5.8 percent. Table II clearly indicates that the expenditure per
student as a percentage of GDP per capita is highest for Malaysia at the secondary and
tertiary levels. The statistics for Malaysia indicate gross enrolment rate at tertiary level
was 28 percent as compared to Thailand’s 35 percent in the year 2000 (UNESCO, 2003).
The results indicate that there is gross inefficiency in tertiary education in Malaysia
which results in education generally being more costly than its neighbouring countries.
However, this paper does not propose to examine the details of the increasing cost of
education nor what may be the possible causes of this increase.
As the capacity of these public institutions to admit students is also limited,
households face the high possibility of paying for their children’s private tertiary
education as compared to public tertiary education because the probability of a student
pursuing his or her higher studies in private institutions is almost 50 percent based on
the information (Table I). The question on the affordability of private tertiary education
is therefore of central concern to every household and in general the policy makers
or government of Malaysia. As Malaysia strives hard to achieve its Vision 2020 goal of
becoming a fully developed nation by the year 2020, the affordability as well
accessibility of tertiary education plays a crucial role in producing the needed quality of
human capital to drive the economy then.
Affordability of education in other countries

The necessity or choice of private education in general and private tertiary education in
specific is not inevitable only in Malaysia. In Australia, an increasing proportion of
primary and particularly secondary pupils study at private schools. In 1986, about
30 percent of secondary pupils were attending private schools, whereas in 2003 this
Primary Secondary Tertiary
Malaysia 12.8 22.3 83.3

Singapore 7.9 12.9 33.5
Thailand 16.5 11.7 33.0
Table II.
Note: Expenditure per student is the public current spending on education divided by the total Expenditure per student
number of students by a level, as a percentage of GDP per capita (percentage of GDP
Source: The World Bank (2005), WDI 2005 for Malaysia, Thailand and Singapore per capita), 2000
IJSE figure reached about 35 percent. Total enrolments at both primary and secondary
38,4 private schools rose by 1.7 percent per annum over the 15 years from 1986 to 2001,
compared with a more modest increase of 0.18 percent annually for government schools
(Australian Bureau of Statistics, 2003a, b). Percival and Harding (2003) estimate that “it
will cost the average Australian couple about $448,000 [March 2002 AUS dollars] to raise
two children from birth until the end of their 20th year”. According to their calculation,
388 around 11 percent (or AUS$50,000) of the $448,000 is spent on education and child care.
According to another estimate, “it would cost the average Australian household
approximately $40,000 to put a child through primary and secondary education (12 years
education)” (The Lifeplan Fund Management, 2003, p. 5). This does not include indirect
costs such as earnings foregone. They argued that one can hypothesize that there are at
least two principal factors contributing to the rising cost of education in Australia:
(1) The ratio of students attending private schools (primary and secondary) to total
number of primary and secondary students.
(2) The introduction of Higher Education Contribution Scheme (HECS) in 1989.
The Valadkhani et al. (2005) study had indicated the increasing number of students
enrolled at non-governmental schools (primary and secondary) and also the introduction
of HECS have significantly and positively contributed to the rising cost index of
education in Australia over the last two decades. Andrews (1999) and Aungles et al.
(2002) have examined the effect of HECS changes on the demand for higher education for
various groups of student population including persons from lower socio-economic
backgrounds. However, Andrews (1999, p. 19) suggests:
[. . .] that there is no compelling evidence that the effects of the cost increases flowing from the
introduction of differential Higher Education Contribution Scheme (HECS) support the
proposition that Higher Education Contribution Scheme (HECS) affected the socio-economic
composition of students.
On the other hand, Aungles et al. (2002) suggested that in line with the overall expansion of
the higher education system, the introduction of HECS provided more opportunities for
higher education among persons from low socio-economic status (SES) backgrounds. It is
argued that the introduction of HECS and its variants have not discouraged overall
participation in higher education among persons from a low SES background. The share of
males from a low SES background in HECS Band 3 courses (the most expensive) declined
appreciably, by 38 percent, following the introduction of differential HECS charges
(Aungles et al., 2002, p. 2). In other words, “the higher costs for courses such as medicine
and law may have induced a small number of low socio-economic status males to switch to
courses with lower charges courses” (Chapman and Ryan, 2003, p. 3). Laws and Fiedler
(2002) examined the cost of private school education in Australia and found on average it
costs AUS$13,400 to $42,246 for five years private secondary education. Accordingly, they
reported that incremental pre-tax family incomes of between AUS$200,303 to $64,609
would be required to fund this education over the same five-year period.
The situation in the USA is not far different from other countries. Hill and Winston
(2006) in their study in the USA found that on average families from all income groups
spent 15 percent of their household income on their children’s tertiary education. College
tuition fees rose more slowly than it did in recent years, but nevertheless outpaced
inflation. Attending a four-year university could costs between US$10,000 to $50,000 and
for most families paying for the education of their children has become a major expense Private tertiary
(“The Cost of College in the United States”, Linda, 2005). In a related study on affordability education
of higher education in Colorado found that whilst higher education is affordable to
students and their families form upper- and middle-income group, it was not affordable
to the lower income group. The share of household income of lower income group needed
to pay the average cost of higher education was 23 percent, 27 percent and 66 percent for
community colleges, public four-year university college/university and private four-year 389
college/university, respectively, (Longanecker, 2007). In Indiana, the college price or cost
rose faster than family income because while inflation grew at 7 percent per year, tuition
costs almost doubles every ten years (Indiana Commission for Higher Education, 2008).
Canadian families would have to spend on average 17 percent of their income to
cover the average cost of attendance at a university (Usher and Cervenan, 2005). The
net cost of a university education in Canada was far in excess compared to the USA.
The out pocket expenses for Canada was also higher than the USA. However, the study
did not examine whether low-income students from historically under-presented
groups successfully complete their university education.
Affordability of education in Malaysia

Empirical studies on the affordability of private tertiary education are an unexplored area
in Malaysia. However, evidence on related studies on tertiary education in general is
available on a moderate scale in Malaysia. The National Higher Education Research
Institute (NHERI) of Malaysia is a body solely responsible for undertaking strategic higher
education policy research for the Ministry of Higher Education of Malaysia. Since its
inception in 1997, more than 40 separate studies have carried out by the NHERI. However,
only two studies was carried out on the issue of affordability of tertiary education. The
first study titled “Research paper on cost of tertiary education in Malaysia: What should be
the fees for an Undergraduate program?” covered the issue of the right fees to be for
charged for undergraduate students in public tertiary education institutions. The second
study titled “A study on students loan scheme and human capital development: the case of
the National Higher Education Fund” explored the financing schemes arrangements for
tertiary students. However, no specific study has yet to be carried out by (NHERI)
specifically on affordability of private tertiary education, although empirical findings on
this matter is of national and strategic importance, as explained earlier. The other few
studies on tertiary education in Malaysia include a study on the competitive advantages of
private higher educational institutions in the state of Sarawak Malaysia by Lindong
(2007). Another study by Sivalingam (2006) examined the privatization of higher
education in Malaysia. Other studies areas include higher education reforms in Malaysia,
focused on public tertiary education by Sato (2005), a study on restructuring a higher
education institution by Sohail et al. (2006), a study on trade and investment linkages in
higher education services in Malaysia by Tham and Andrew (2007) and a study on
challenges of corporatisation and globalisation on educational reform in tertiary education
by Yahaya and Abdullah (2003). Our effort in this regard is distinguished by being a first
major attempt at determining the affordability of private tertiary education in Malaysia.
5. Financing of tertiary education

The funding of schools and universities can be a serious issues in Malaysia, just as in
Australia, where the total operating revenue of the 40 higher education institutions
IJSE in 2002 was $11.6 billion, of which 16 percent was collected through HECS and 41 percent
38,4 (54 percent in 1997) was financed by Commonwealth Government Grants (Department
of Education Science and Training, 2002). Similarly, in 1997, the Commonwealth and
State Governments altogether funded:
.
up to 95 percent of revenue for government schools; and
.
56 percent of revenue for non-government primary and secondary schools
390 (Borthwick, 1999, p. 1).
It is important to note that the cost of education can be expected to become more
expensive in Malaysia, as they had been for advanced countries such as Australia, the
UK, Canada and the USA.
Finance is the major factor that contributes to the low participation rates in tertiary
education amongst lower socio-economic groups (Bowers-Brown, 2006). The literature

above clearly elucidates the need for adequate financing facilities for students to pursue
their tertiary education. In a growing number of countries around the world, public
resources are proving increasingly insufficient to finance tertiary education. However,
student loans are increasingly important as financing mechanism of tertiary education.
Student loan programs are normally funded by the government, private sector companies,
alumni, philanthropists and international agencies (Salmi, 1998). Student loan as a
fraction of GDP per capita accounted for less than 1 percent for Brazil, Mexico and Peru
while it accounted for 7 percent of the same measure for Northern European countries
(Murakami and Blom, 2008), which reflects the lack of financing in developing countries.
In Malaysia, the predominant body established in 1997 to offer subsidised loans to
help students met the high costs charged by the private tertiary education institutions is
the National Higher Education Fund (NHEF). The eligibility of the loans was later
extended to public universities also.
Table III clearly shows the allocation of loans to students from private tertiary
education only totaled 20.6 percent from 1997 to 2005. Private tertiary education
institutions charge higher fees compared to their public counterparts. In this regard,
it can be seen that although the national fund was set with the intention help private
intuitions students, the data on Table III prove otherwise. Students from private tertiary
education in Malaysia are not getting the required financing to pursue their education.
Public Private Total number of Proportions of students from Amount of loans

Year univ. univ. students private institutions (%) (RM mil.)
1997 11,905 179 12,084 1.5 219.5

1998 17,564 718 18,282 3.9 365.5
1999 76,389 6,769 83,158 8.1 1,683.6
2000 85,764 8,286 94,050 8.8 1,849.6
2001 84,306 26,338 110,644 23.8 2,134.1
2002 86,186 19,591 105,077 18.5 1,981.2
2003 86,057 26,564 112,621 23.6 1,863.4
2004 88,282 30,829 119,111 25.9 2,264.8
2005 98,755 45,704 144,459 31.6 2,762.9
Total 635,208 164,978 800,186 20.6 15,183
Table III.
Allocation of the NHEF Sources: Government of Malaysia (2007a); The World Bank (2007)
This problem is further compounded by the eligibility criteria of the national fund which Private tertiary
is not based on income of families. This policy often results in loan also being granted to education
students for wealthy background.
The NHERI conducted a study on students’ loan scheme by the NHEF, NHERI, 2006.
Their study found 65 percent of students who obtained loan from the NHEF came
from families with income ranging from RM5,000 to 50,000 per month. Within this
65 percent group, the biggest group was families with incomes from RM5,000 to 391
10,000 per month (38 percent) followed by families with incomes from RM10,000 to
50,000 per month (27 percent). Students from families with low income of less than
RM1,000 per month accounted to only 18 percent of the total students who obtained
loans while families with income ranging from RM1,000 to 5,000 per month accounted
for another 15 percent. A surprising 2 percent of loans were given to students who came
from families with income of more than RM50,000 per month. The conclusions made by
the NHERI appear surprisingly ironic because the reason given for the phenomenon of
families with high income group making up a high proportion of lenders from the NHEF
is their apparent willingness to borrow and expectation of ability to pay back their loan.
The reason given by NHERI for low proportion of families from the low income groups
who apply and obtain loans from NHEF is their apparent unwillingness to borrow,
perception among this group that borrowing is a risky behavior and their fear of being
unable to pay back loans. However, it was rightfully pointed by NHERI that another
reason for the low proportion of families from low income groups who apply and obtain
loans from NHEF is because enrolment rate at the tertiary education level is low among
this group. Although the findings of the study by NHERI indicates clear problem of
financing of tertiary education for families from the low-income group, no concrete
suggestion to revamp the policy of the NHEF in granting loan were made and neither
were there further initiation to explore this problem in more detail.
As mentioned in the literature above, the private tertiary education supported half of
the tertiary education capacity of Malaysia, but however in terms of financing support of
students, the only allocated it a mere 31.6 percent of the loans distributed in the year 2005.
There not many other bodies providing loans to students of private tertiary education in
Malaysia, except the local commercial banks with provide loans which charges interest
rates which almost approximates the market interest rate of borrowing in general.
Scholarship opportunities are available in Malaysia, but not to the extent of the vast
number of participating government and non-governmental bodies in developed
countries. There were approximately 15 common government-based scholarships
providers, including foreign government scholarships available in 2007 in Malaysia. The
Public Service Department (PSD) (Government of Malaysia, 2007c) of Malaysia is the
largest scholarship provider for the tertiary education in the country. The total number
of students sponsored by PSD to study in abroad was 700 in the year 2000 and increased
to 1,800 in 2007, while the students sponsored to study locally was 3,800 in the year 2000
and increased to 7,900 in 2007. It was further reported that in line with its commitment to
enhance the capabilities of human capital, the government approved an increase of up to
97 percent in subsistence allowance involving Malaysian students studying in the USA,
Britain and Canada an increase of between 23 and 84 percent for students sponsored in
local public universities. The majority of PSD’s locally sponsored students study in
public tertiary education institutions, namely universities. Only a handful of
students are sponsored to study in private tertiary education institutions. The number
IJSE of corporate bodies, banks and non-profit bodies that provide scholarships are
38,4 approximately 49, 5 and 25, respectively. However, it should be noted that in general all
the scholarship awarding bodies grant a major portion of their total scholarships
allocation to students from public tertiary education institutions. This practice
further alleviates the financial burden of students in private tertiary educations.
Universities or college-based scholarships are available for students and approximately
392 32 institutions actively grant scholarships (Malaysia-Scholarship.com, 2008). It was
reported earlier that in 2007 there were a total 507 private tertiary educations institutions
(Government of Malaysia, 2008a). Although most of these mentioned 32 institutions are
private tertiary institutions, the number of scholarships granted each year are limited
and given in various forms. Most of the scholarships only cover part of the tuition fees of
students and does not include the cost of living and is primarily awarded to students who
obtained excellent high school examination results. The financial assistance in Malaysia
is therefore lacking for private tertiary education students and far lacking in terms of
coverage and comprehensiveness compared to assistance in developed countries. Most
of the universities or colleges in developed have well-established programs to assist
students from low-income families.
In the USA, the general public wants the government to help students who are
struggling to pay for tuition and other fees with an overwhelming 84 percent of adults
saying the federal government should play a significant role in higher education while
another 70 percent agreeing on federal government’s role in helping families afford
college (Hart and Teeter, 2003). Hill and Winston (2006) explored the question on whether
could highly academically able but low-income student reasonably aspire to go to an
expensive and highly selective college in the USA and found the answer was a resounding
“yes”. They also revealed that financial aid policies of the college played a significant key
role in ensuring affordability of students. The amount spent by households on their
children’s education declined significantly after given financial aids which saw families
in the lowest income quintile ranging from US$0-21,544 required to pay less than
US$1,000 to attend Williams College. This college is representative of the highly selective
private colleges and universities like Yale, Swarthmore and MIT.
The Government of Britain similarly took adequate steps to address the problem of
education financing. The 1998 education reforms in Britain failed to rectify some issues
like inadequate loan to cover living costs and no loan to cover tuition fees, and
incorporated a blanket interest subsidy, among others. The subsequent 2004 reforms
addressed these issues and extended the loans to cover tuition fees and increasing the
loan to cover living costs. And repayment threshold were increased by a repayment
percentage, linked to pre-determined earnings bracket. The 2006 reforms now replace
the up-front flat fee with a variable fee. Students now pay the fee up-front or can take a
loan, which will be paid directly to the university, thus making the financial position of
the university relatively independent of the student’s payment mode. The student only
repays upon graduation in a manner similar to income tax and social security
contributions until the loan is fully paid. Students will be entitled to a grant in addition to
a loan. This ensures that no student from a poor background is denied assistance or an
education opportunity. And when it comes to repayments, people with poor earnings
will have their balance of loan written off after 25 years. In the case of teachers of
shortage subjects, a 10 percent of the loan will be written off. There is also the
scholarship for students from poor background with outreach programs to school
children to improve information availability. The end result is that affordability and Private tertiary
accessibility is made available to all, contributing to the efficient resource allocation and education
redistribution while improving competition and fair play (Barr, 2005).
6. Demographic rural-urban perspective

The rates of urbanization are said to strongly correlate to increase in per capita income
and improved access to essential services and amenities like education (Mohamed, 2002). 393
When the national income per capita is analyzed further from the demographic
perspective by sub-dividing then into urban and rural households, the income per capita
average of families in urban areas is normally higher from that of rural families.
Saari et al. (2007) reported that Malaysia’s income per capita of rural household in 1970
was RM2,400 and rose to RM20,748 in 2002 which represented an increase of 765 percent.
Whereas the reported income per capita of urban household was RM5,136 in 1972 and
rose to RM43,824 in 2002 which represented an increase of 753 percent. The rate of
increase of rural income per capita of Malaysia slightly outpaced its urban counterpart
which is the result of the government’s continuous affirmative economic action to reduce
the income distribution inequalities between urban and rural households. However,
the salient point here is the fact that in absolute terms, the income per capita of
urban household in Malaysia was twice the amount of their rural counterparts in 2002.
However, the rising cost of living in the city has influenced the affordability
of households residing there. The interesting question worth exploring is whether city
households (the urbanites), in spite of their higher income need require more income
generation to able to afford their tertiary education aspirations. As at 2007, there were
12 cities in Malaysia. On the other hand, the number of town in Malaysia stood at 138.
Village represents small settlements and includes all other areas of residence except city
and town (Department of Town and Country Planning, 2008).
7. The Malaysian study methodology

This study investigates the relationship between household income and students
admitted to private tertiary education institutions in Malaysia. Usher and Cernevan
(2005) on their study of the affordability of tertiary education of 16 countries measured
affordability of tertiary education based on “affordability to pay” which is defined as
education cost as a fraction of GDP per capita. Education cost consisted of weighted
percentage of education cost (tuition fees, books and other necessary materials) living
costs (boarding costs) grants, loans and tax expenditures. Accessibility was measured
as a weighted percentage of participation rates and attainment rates. They however
agreed that there are many possible definitions of what constitutes affordable and
accessible education. Laws and Fiedler (2002), in the study on the true cost of private
school education in Australia, measured cost of education as comprising acceptance or
enrolment fee, tuition fee, book fee, technology fee, parent levy and building fund. The
cost of education was compared with the level of family income generation required
to fund private school fees. The family income used was the pre-tax family income.
Murakami and Blom (2008), on their study of affordability of tertiary education in four
LAC, fully adopted Usher and Cernevan’s (2005) method of affordability measurement.
This study adopts a more rudimentary approach to measure affordability as
compared to the method adopted by Usher and Cernevan’s (2005). Instead of
determining the percentage or fraction of GDP per capita spend on tertiary education,
IJSE this study gathers primary data on actual income of households of students in private
38,4 tertiary education institutions and compares it with the GDP per capita. Compared to
forecasted or estimated household income, actual household income is undeniably more
accurate but not easily available as Malaysians are traditionally reluctant to reveal their
income information. In this regard, this ability of this study in obtaining the actual
household income for analysis is valuable and an achievement of its own. Measuring
394 affordability based on education cost as a fraction of GDP per capita also involve a
certain extend of element of subjectivity. This is because different households have
different appetite or preferences and allocation of funds available for tertiary education
purposes. Thereby, while one household may be prepared to spend half of their income
on tertiary education of their children and still consider it affordable, another household
may find paying such similar proportions not affordable. Additionally, GDP per capita
itself is not an actual measure of income but rather an approximate average of the value
of goods and services produced per capita. In this regard, this study proposes the use of
actual household income as the proxy to measure affordability in general regardless of
the effect of the different appetite, preferences and constraints of individual households.
Household income is represented by the pre-tax gross household income comprising
employment, business, rental, interest and, etc. Household income is used as a proxy to
measure “affordability” and statistical comparison is made with the GDP per capita.
This comparison is intended to gauge in general terms the actual mean of households of
students studying in private tertiary education institutions to determine if it is
significantly different from the GDP per capita. There is no specific study that examines
affordability of education in Malaysia comparing the actual income of households
against the GDP per capita, more so on private tertiary education. Statistically
significant higher mean income of households would point out to the significant absence
or low participation of students from low- and average earning household in the private
tertiary education institutions hence indicate non-affordability. Thus, questions on the
affordability of low- and average-earnings families to send their children for tertiary
education, to be measured from the average income perspective will be attempted to be
answered empirically. In that background, this paper attempts to examine the area of
tertiary education and affordability in the context of a private institution. The second
part of this examines the affordability of private tertiary education of households from
the demographic rural-urban perspective and is divided into three categories based on
the location of residence of households: city, town and village. The final part of this study
provides a critical review of the financing facilities available for students in private
tertiary education in Malaysia.
The objective of this study is therefore:
(1) To determine whether the national income is significantly different from the
national income per capita in order to draw conclusions whether private tertiary
education is affordable to the average earnings households in Malaysia.
(2) To determine whether the household income of families from city, town and
village is significantly different from each other in order to conclude whether the
urban-rural factor plays a part in families’ affordability to send their children to
private tertiary education.
(3) To critically evaluate the financing of private tertiary education to determine if
it is adequate.
In light of the above objectives, the hypotheses developed for this study are: Private tertiary
H0(a). There is no significant difference between the national income per capita education
and household income of families who send their children for private tertiary
education.
H1(a). There is significant difference between the national income per capita and
household income of families who send their children for private tertiary 395
education.
H0(b). There is no significant difference among the household income of families
from city, town village.
H1(b). There is significant difference among the household income of families from
city, town village.
The survey, conducted using a questionnaire responded to by students, established the

income of the parents in general and by specific groups from city, town and village. This
study does not attempt to answer any of the questions above in a definitive wisdom.
However, the goal of this study is to provide more objective information to policymakers,
thus compelling them to confront these questions in a logical manner and encouraging
re-evaluation of their policies’ effectiveness.
8. Data
The sample selected for this study consisted of students of XYZ University (not its real
name), who were educated in private tertiary education system. A random selection was,
thus made. As per the data provided by the Ministry of Higher Education of Malaysia,
during 2008, 525 institutions were listed as “Private Institutions of Tertiary Education”.
These included universities colleges, colleges, community colleges and, etc. Students
from XYZ University total 20,000 and come from a variety of backgrounds, income
groups and well spread in terms of cities, towns and villages. The sample chosen is
therefore appropriate to explore the topic affordability of private tertiary education in
Malaysia in broad sense as XYZ University is representative of the many private
tertiary institutions in the country.
Table IV contains the general information on the sample size, income range of
households and origin of place of residence of respondents. The study indicates the mean
income of households who send their children to pursue their tertiary qualification in a
private university (XYZ University) is RM68,748 (approximately US$20,000; exchange
rate of US$1 ¼ to RM3.43 at the time of data analysis).
The one-sample test analysis in Table IV was applied to test Hypothesis H(a) on
whether the mean income of households who send their children to private universities
differ significantly from Malaysia’s income per capita. The standardized difference
between the tested values of income per capita of Malaysian households in 2007 of
RM22,000 against the average income of households who send their children to private
universities is 8.805; and the p-value is 0.000, which indicates statistical significance at
the level of 1 percent. Thus, H0(1) is rejected and it is can be accepted that here is significant
difference between the national income per capita and household income of families who
send their children for private tertiary education The effect size is 82 percent, which is
considered large. The power of the test is also 99 percent. Furthermore, the 95 percent
IJSE
Location of household
38,4 Households Surveyed Overall City Town Village Location overall
n 115 42% 46% 12%

Min. income p.a. (RM) 5,000 15,000 15,000 5,000
Max. income p.a. (RM) 285,000 285,000 235,000 125,000
396 Mean of income (RM) 68,748 86,688 58,585 45,714
One sample t-test
Tested value 22,000
t-stat. 8.805 *
Effect size 82%
Power 99%
Test of homogeneity of variances
Levene stat. 5.0 *
Sig. 0.008
ANOVA
Between groups
Sum of squares 2.8349649389
F-stat. 4.737
Table IV. Sig. 0.01
Household income
of parents Note: The mean difference is significant at: *0.01 level
confidence interval for the population mean is from 36,248 to 57,296. The tested value of
RM22,000 falls below this interval. It could be concluded therefore that the mean income of
households who send their children to private tertiary education institutions is more than
RM22,000, or in fact it is more than three times the income per capita of Malaysia.
The proxy of affordability which is the average household income reveals the general
level of income of households who are able to support their children’s tertiary education
in Malaysia. The analysis above implies private tertiary education is costly for the
average Malaysian family, what more the poor and hard core poor households as
evidenced from obvious absence of low- and average-earning households’ children in
private tertiary education institutions. The fate or future of children of average-earning
households who fail to get a place to study in public tertiary education, compounded by
the problem of inadequacy or lack of sufficient student assistance or financial-aid
programs like scholarships and loan in Malaysia is a pressing question which warrants
concerted solutions from the policy makers. In this regard, the proportion of household
income spent on children’s tertiary education could be one of the future directions of
research in this area.
The second of part this research studies the difference of mean income of households
by location of residence. The respondents are required to state their place of residence
which is either in a city, town or village. The one-way ANOVA analysis was applied
to test hypothesis H(b). A total of 87 percent of the respondents’ location of residence is
either in a city or town. The initial parametric test results indicate that the mean of
household income is highest for city, followed by town and village, respectively.
In addition, the Levene’s test of homogeneity of variances was applied to test
homogeneity of the three groups tested. The Levene’s test of homogeneity of variances
shows a p-value of 0.008, which is less than 0.05. The equality of variances was not met,
which means that the groups of city, town and village are not homogeneous.
From the ANOVA table, the p-value was 0.01 which is less than 0.05. Thus, H0(b) is Private tertiary
rejected and it can be accepted that there is significant difference among the household education
income of families from city, town village at least one group (location of residence) differs
significantly in terms of household income. In Table V, the Dennett’s multiple comparison
test was chosen to analyze the statistical difference in household income between city,
town and village because of non-homogeneity of these groups. From the Dennett’s multiple
comparison, city is significantly different from town and village. However, town and 397
village did not differ from each other pair wise. It can thus be concluded that the household
income of parents from city is significantly higher compared to town and village.
Owing to the non-homogeneity of the three groups tested, in Table VI, the
Kruskal-Wallis test is applied to rank the average income of households of city, town and
village. The results below further support the above findings. The p-value
of Kruskal-Wallis test was 0.02, which is less than 0.05. Therefore, it shows that the
mean rank of household income for city, town and village indicate that city ranks higher
compared to town and followed by village. The results are similar and supported by the
earlier reported results of the parametric tests.
These findings suggest that household income of families residing in city is higher
compared to town and village due to the higher income per capita in Malaysian cities as
reported by Saari et al. (2007). However, an important issue to take note at this juncture is
the fact that the cost of living and inflation in cities are generally higher as compared to
Town and Village and therefore requires higher income generation to support children’s
education. The average income of households from city is RM86,688, which is nearly
Dunnett’s
comparision/multiple 95% Confidence interval
Location Location Mean difference SE Sig. Upper limit Lower limit
City Town 28,103 * 1,148 0.040 123 56,082

Village 40,973 * 13,825 0.015 6,560 75,386
Town City 2 28,102 1,148 0.040 256,082 2123
Village 12,870 11,723 0.620 217,078 42,819
Village City 240,973 * 13,825 0.015 275,386 26,560
Town 2 12,870 11,723 0.620 242,819 17,078 Table V.
Dunnett’s multiple
Note: The mean difference is significant at: *0.05 level comparison
n Mean rank Household income
Ranks
City 48 67.3
Town 53 53.5
Village 14 43.0
Test-stat.
x2 7.65 *
df 2
Asymp. sig. 0.02
Table VI.
Note: The mean difference is significant at: *0.02 level Kruskal-Wallis test
IJSE four times the national income per capita. The findings also reveal that households
38,4 from town and village with lower household income per capita as compared to their city
counterparts are able to send their children for private tertiary education. Inference can
be drawn from these findings that households from city require higher income
generation to afford private tertiary education as compared to their town and village
counterparts. In other words, low and average households from city would find more
398 difficult financially, to afford private tertiary education compared to their town and
village counterparts. These interesting results need the rightful attention of the
government and policy makers to help alleviate the problems of, not only the town and
village households, but also city households.
9. Concluding remarks
The study reveals that households of students in private tertiary education institutions
earn income at least more than three times more than the national average income
per capita, thus providing a general outlook on the affordability of lower and average
income households in this context. The cost of tertiary education in Malaysia, as in other
comparable countries, for example, Australia has been rising faster than the overall rate
of inflation.
Although Malaysia’s per capita income rose by 40 percent in 2007 compared with
2004, this Malaysian study indicates that the average income of a household who sent
their children to be at least RM68,748 (US$20,000) and this is about three times the income
per capita of Malaysia. This problem is further compounded by the lack of financing
facilities available for students in private tertiary education institutions as indicated in
the literature earlier. The aspiration of the Malaysian Government is to raise the tertiary
enrolment rate from 25 percent in the year 2000 to 40 percent by the year 2010 because
currently only 17.7 percent of the labor force hold some form of tertiary education
qualification. However, this effort could be undermined if the current trend s identified in
this study continues (Economic Planning Unit (EPU) and The World Bank, 2007).
Furthermore, as revealed by the results of statistical tests conducted, it is clear that the
mean income of parents from the city is higher than those from the town and the villages.
This indicates the presence of more of lower income household students from town and
village as compared to city in private tertiary education institutions and does not seem to
complement the intention of the Ninth Malaysia Plan policy to allocate more monetary
assistance to parents from the rural areas. Such policies may need to be reconsidered. The
higher income of households in the city is partly absorbed by the higher cost of living in
the city and therefore there is a need to sustain a higher level of income to support their
children’s education in a private tertiary education institution. Although Saari et al.
(2007) reported that the Ninth Malaysia Plan (the country’s five-year economic
master plan) gives more opportunities to the rural households to increase their level
of income, the conventional wisdom of policy makers to allocate more financial aid
to students from rural areas as compared to urban areas needs to be re-examined in
light of the evidence gathered. This finding could therefore provide guidance on future
polices devised by the relevant policy makers to improve the affordability of tertiary
education in relation to the different specific needs of families residing in city,
town and village.
A report in 2006 in the USA (Gerald and Haycock, 2006) highlighted a number of
upcoming factors at the federal, state and institution level which would create serious
negative consequences on tertiary education opportunities for the low-income group. Private tertiary
Among others, the contributing factors are: education
(1) federal, state and institutional support is increasingly shifting away from
students with the most financial aid needs;
(2) early intervention and awareness program that target low income are critical to
college access but have been threatened with elimination or budget cuts; and 399
(3) colleges are using institutional aid to compete for students, usually middle and
upper income.
As result of this serious threat, the US Congress overwhelmingly approved a bill named
Higher Education Opportunity Act, whose main goals are to put in smart objectives to
improve the student aid process, restore confidence in the student loan programs and
provide more low-income students the chance to pursue a college education (Dervarics,
2008). The Malaysian goal of achieving a developed nation status by the year 2020
would entail tremendous demands on the education requirements and this could be
achieved by making education affordable for all segments of society across a wide
spectrum of socio-economic background in a concerted form. Therefore, the Ministry of
Higher Education of Malaysia and other related agencies of the government must review
the existing policies of providing assistance to students in private tertiary education
institutions to ensure sustainable human capital growth for the country because this
problem has a chain-effect like consequence. This is because studies have shown that in
families without a history of participation in tertiary education, the expectations of
attending university among their children is unclear (Bowers-Brown, 2006). The practice
of the Singaporean Government of rewarding students financially by linking such
awards to students performance and their socio-economic background, for example
students whose performance, that do not fall within the top 5 percent may still qualify for
some form of financial incentive if they are from families of relatively less educated
parents (Mukhopadhaya, 2002) could also be emulated by Malaysia.
The suggestions outlined for policy makers a result of this study are as follow:
.
The Government of Malaysia, especially the Ministry of Higher Education and
its various agencies should evaluate its higher education policy in light of the
affordability concerns highlighted in this study. Concrete reforms need to be put
in place to address the non-affordability of low and average income households.
.
The NHEF, as the principal funding body for financial aids in the form of study
loan should reexamine it policy on awarding financial aids to students primarily
based on academic performance and consider the essential need to provide aid
based on income of households. Introduction of such measures would be vital for
low- and average-earning households to afford private tertiary education.
.
The conventional wisdom of policy makers in adopting an aggressive and
affirmative strategy to allocate more financial aid to students from rural areas
as compared to urban areas needs to be re-examined in light of the evidence
gathered. Equal emphasis for channeling of funds should be directed towards
urban households as well in light of evidence show in this study that the urban
households are faced with higher cost of living and inflation and therefore need
higher income to afford private tertiary education.
IJSE .
Learning from similar experiences and actions taken in the USA and the UK,
38,4 Malaysia should enact new laws which guarantee students from low- and
average-earning household study loan. These loans should cover tuition fees,
living costs and subsistence allowance. Additionally, the repayment scheme
should also be flexible contain possible write-off options for the hardcore poor.
.
Private tertiary education in Malaysia is market oriented without any financial
400 support from the government and therefore needs to charge expensive tuition fees
in order to survive financially. Government grants, subsidies, scholarships and
other financial aid currently provided to public tertiary education institutions
should also be channeled to private tertiary education institutions as well. These
measures would reduce the disparity between fees charged by public and private
institution, thus resulting in increased affordability for tertiary education.
.
The corporate sector in Malaysia should play a more active role in tertiary
education development of the country. As an important beneficiary of the
tertiary education system in terms of the input of workforce for their needs, these
corporations should allocate more funds in the form of scholarships for students
pursuing tertiary education. The government on the other hand could encourage
the adoption of this corporate social responsibility obligation of firms by
providing incentives like tax breaks, tax exemptions and, etc.
Malaysia is considered a “upper-middle income country” and is considered as of the most

developed of the developing countries (PricewaterhouseCoopers, 2004-2005). The
literature above clearly shows the problem of affordability of tertiary education is not
limited to developing countries only but transcends national, geographical and social
boundaries. However, the matter requires more urgent attention in developing countries
because in many key indicators like education attainment rates, income per capita,
purchasing power parity and, etc. developing countries are far behind the achievement
rates of developed countries. If human capital theorists argue that education is the
primary source for higher learning, it certainly makes sense to provide or make available
education to low-income groups of society to reduce poverty, degree of income inequality
and improve economic growth (Olaniyan and Okemakinde, 2008). And if Malaysia,
which is considered one of the most developed countries among the developing
countries, needs to pay attention to issues highlighted in private tertiary education
institutions, the most important it would be for other countries in this group to seriously
examine these issues too.
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406
About the authors
Samuel Jebaraj Benjamin is a Lecturer at the Faculty of Management, Multimedia University.
Samuel Jebaraj Benjamin is the corresponding author and can be contacted at:
samuel@mmu.edu.my
M. Srikamaladevi Marathamuthu is a Lecturer at the Faculty of Management, Multimedia
University.
Saravanan Muthaiyah is a Lecturer and Deputy Dean at the Faculty of Management,

Multimedia University.
Murali Raman is a Lecturer and Deputy Dean at the Faculty of Management, Multimedia
University.
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

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This article has been cited by:
1. J. Muthiani Malechwanzi, Hong Shen, Caroline Mbeke. 2016. Policies of access and quality of higher
education in China and Kenya: A comparative study. Cogent Education 3:1. . [Crossref]

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International Journal of Social Economics

Affordability of private tertiary education: a Malaysian study

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Design/methodology/approach – The relevant literature is reviewed to provide an overview of the

done (Hart and Teeter, 2003).

2. Education and cost

been used in number of studies (Usher and Cervenan, 2005).

Public tertiary education institutions

Affordability of education in other countries

Primary Secondary Tertiary

Malaysia 12.8 22.3 83.3

Affordability of education in Malaysia

5. Financing of tertiary education

education amongst lower socio-economic groups (Bowers-Brown, 2006). The literature

Public Private Total number of Proportions of students from Amount of loans

1997 11,905 179 12,084 1.5 219.5

6. Demographic rural-urban perspective

7. The Malaysian study methodology

The survey, conducted using a questionnaire responded to by students, established the

n 115 42% 46% 12%

City Town 28,103 * 1,148 0.040 123 56,082

n Mean rank Household income

Malaysia is considered a “upper-middle income country” and is considered as of the most

through regulations”, working papers, University of Sains Malaysia, Penang, October.

Education, University of Denver, Denver, CO.

Saravanan Muthaiyah is a Lecturer and Deputy Dean at the Faculty of Management,

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