The new funding model for universities emphasises completed degrees
At the beginning of the year, the Finnish government approved a new funding model for Finnish universities for the term 2021–2024. The model is a tool for allocating core funding to universities. The new model makes it possible to gain funds by streamlining study paths so that students graduate with a bachelor’s or master’s degree within the targeted time frame.

The core funding awarded by the Ministry of Education and Culture constituted 58% of the University of Helsinki’s overall income last year. In 2021 funding will be based on the results of 2017–2019, which means that the model is operational in practice.

The ministry has stated that the new funding model will establish stronger incentives for strategic planning and reform at universities.

Education increasingly important

Instead of students who have completed studies worth 55 credits, only bachelor’s and master’s graduates will be taken into consideration in the new model, increasing the emphasis on completed degrees (from 19% to 30%). Under the new model, field-specific coefficients (1, 1.75 and 3) will be introduced. Funding will be allocated up to a funding limit corresponding with the degree targets of individual fields of education set for the term. The emphasis on student feedback will remain unchanged.

“In the big picture, the new model highlights the significance of education. Universities and faculties are currently feverishly considering how to make study paths more streamlined, develop the relevance of studies to professional life and support the boosting of career identities in both professional practice and in research” says Susanna Niinistö-Sivuranta, director of development for the Academic Affairs sector of the University of Helsinki.

“We have to make sure that graduation is not only down to supervision. In addition, we need to invest even more in the development of teaching and student guidance. Other effective measures include improving the response rate of the Finnish Bachelor’s Graduate Survey and encouraging bachelor’s graduates to request their diplomas in good time,” she notes.

“Graduating is key”

The University can fare well under the new funding model by smoothing out its study paths so that bachelor’s and master’s level students graduate within the targeted time frame. The number of such degrees will be emphasised by applying a coefficient of 1.5, while the coefficient for degrees completed no later than 12 months after the targeted time frame is 1.3. The coefficient applied to another degree of the same level by the same student is 0.7.

“I believe students graduating is key, followed by graduating within the targeted time frame. The University is not a uniform entity; for example, many more students at the Faculty of Law graduate within the time frame than at the Faculty of Arts. Leakage is a problem at the Faculty of Science, meaning that students transfer to professional life in the middle of their studies without ever graduating.”

“Degree programmes have already identified bottlenecks which cause inefficiencies in studying. We also have to ensure that transitioning from bachelor’s to master’s programmes is smooth.”

There are many ways to gain skills, and in the future expertise obtained by working can be incorporated into degrees more effectively.

“The recognition of previous studies and alternative ways of completing studies must be further improved. Additionally, we are considering the tightening of rules on the order of study completion. In other words, the rules on what you have to study before studying something else may become more specific,” Niinistö-Sivuranta says.

Student exchange still encouraged

Students going on international exchanges, degrees completed by international students and the number of international staff are not taken into consideration in the new funding model. However, international activities can potentially be considered as part of strategy funding.

“We encourage our students to go on an exchange as part of their studies. All degree programmes have an ‘exchange window’, or a period during which going on an exchange is recommended. Credits completed during the exchange can easily be incorporated into your degree.”

In the case of monitoring graduates’ employment, the calculation method will change, as those employed as entrepreneurs will receive a coefficient of 2. The number of graduates with a second-cycle degree from a university employed a year after graduating is used as the employment rate indicator. As a new element, the model will include the results of the nationwide career tracking survey.

Continuous learning increasingly important

Under the new funding model, the emphasis on lifelong learning will be more than doubled from the current level (from 2% to 5%). In the future, lifelong learning will encompass open higher education, specialist education and credits awarded for non-degree studies, as well as collaborative studies, or credits awarded on the basis of cooperation agreements concluded between higher education institutions.

“The number of students involved in lifelong learning will grow, and they will be able to study in the same groups with degree students. Credits awarded for introductory courses organised for upper secondary schools will also be included in the share for lifelong learning,” says Niinistö-Sivuranta.

Importance of publications and international competitive funding to grow

The importance on publications will grow (from 13% to 14%), and the related calculation method will change. A coefficient of 2 will be applied to openly accessible peer-reviewed publications.

The emphasis on completed doctoral degrees will decrease by one percentage point (from 9% to 8%),

while the share of international competitive research funding will grow (from 3% to 6%). The emphasis on other competitive research funding will remain unchanged.

Share of strategy funding growing

The share of strategy funding will grow (from 12% to 15%). Strategy funding is based on agreements concluded with the Ministry of Education and Culture. In addition, the share of funding awarded for national duties will grow (from 7% to 9%). The growth will be allocated to the University of the Arts Helsinki, to be recorded as a national duty.

Corrected 5.11.2019: The right coefficient for openly accessible peer-reviewd publications is 1,2.