Pandemic pushing public universities to brink of financial crisis

If the Covid-19 pandemic shows no sign of abating by next year, public universities in Malaysia will face a serious financial crisis which could disrupt the intake of foreign students who have been their biggest source of income.

Universities have already been financially affected following a drop in collection of fees for postgraduate and doctoral courses, as well as revenue from residential colleges and other joint activities with corporate bodies.

“Fees for postgraduate courses are more critical compared to those for degree students,” Professor Izlin Ismail, who teaches business and accountancy at Universiti Malaya, told MalaysiaNow.

Many universities and tertiary institutions have resorted to online lectures following frequent interruptions due to the Covid-19 pandemic, a fierce wave of which has forced authorities to shut down schools and learning institutions nationwide until year-end.

Izlin said corporate bodies and external agencies are not keen on conducting their programmes with universities digitally, leading to the postponement of many such initiatives and ultimately cutting out a key source of income.

Izlin said the coming year would tell if public universities can survive financially.

“All universities, not just the public ones, will be affected,” she said.

There are 20 public universities and 47 private universities in Malaysia, in addition to more than 30 university colleges and at least 10 foreign branch campuses.

Putrajaya proposed an allocation of RM14.4 billion for the higher education ministry in its recent budget tabled by Finance Minister Tengku Zafrul Aziz.

The allocation includes RM50 million for the improvement of facilities and infrastructure at public universities.

Former Universiti Teknologi Mara vice-chancellor Hassan Said urged public universities to invest in alternative forms of learning in order to stay relevant.

“All universities, not just the public ones, will be affected.”

He said the shift to online learning means universities must upgrade their digital infrastructure and retrain tutors in new methods of learning, as well as new material that suits virtual lectures.

Hassan believes the Covid-19 crisis has had a silver lining for universities: it has taught them to manage finances better.

He said measures that university administrations could implement include work from home arrangements for staff that do not affect productivity.

“Staff cost is very high and could be 65% of income, so this should be managed wisely,” he said, adding that one way would be to downsize.

He said universities could choose to keep only those staff who are needed, or cut salaries.

Hassan said universities should also find ways to generate income by offering exclusive and short-term online courses.

“Universities should review their course content and ensure their delivery methods fulfil the needs of the new norm,” he said.

“This way, they will be able to attract more students.”