Starting from 2003/04 academic year students enrolled in public universities were required to cover their costs of education. Such cost includes full costs related with boarding and lodging and minimum 15% of tuition related costs. This cost sharing regulation imposes a pre-condition on every student to enter a written contract agreement with the respective institution before he is allowed to pursue his education.
Even though, Article 4 of the regulation, states that the amount to be share shall be shall be revealed to the student, this amount is likely to increase at the time of graduation. According to sub article 4 of article 4 the cost of education and training shall be revised at least every three years. Almost all the disciplines in the public universities require four years of study for graduation. A possibility of revision every three years is in effect giving a power to unilateral modify the contract as the regards the total costs require from the student.
The students once gradated will start making payment within six months after graduation if earning income or within a maximum of one year after graduation, in the form of graduate tax of at least 10% of the monthly income. He is expected to pay all of his costs within a maximum of 15 years.
According to article 6 ( 7) a beneficiary [ Article 2 (5) defines beneficiary as a student at a public higher education institution pursuing higher education or training and who has entered into an obligation with the concerned institution for the future payment of the cost of his/her education or training and other services] who decides to go abroad for more than six months before completing the payment of the cost required of him, shall be made to produce a guarantee for the payment of the outstanding amount. However, contrary to this explicit provision most universities refuse to give Degree and Transcript of the student and in some cases other relevant evidences (like proof of language of instruction) until final settlement of debt. However, this is not only contrary to the regulation, but also a manifest violation of the right to education enshrined in F.D.R.E. Constitution.
COUNCIL OF MINISTERS REGULATION NO. 91/2003
HIGHER EDUCATION COST-SHARING COUNCIL OF MINISTERS REGULATION
This regulation is issued by the Council of Ministers pursuant to Article 5 of the Definitions of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. 4/1995 and the Higher Education Proclamation No. 351/2003.
1. Short Title
This Regulation may be cited as the “Higher Education Cost-Sharing Council of Ministers Regulation No. 91/2003″
For the purposes of this Regulation:
1) “Ministry” and “Minister” means Ministry of Education and the Minister of Education, respectively.
2) “Institution” means a public higher learning institution in any region, in Addis Ababa or Dire Dawa offering a post-secondary education with a budget allocated from the Federal Government.
3) “Employer” means any government, private or non-governmental institution or international or regional organization or person employing graduates of higher education institutions including self-employed graduate of the same,
4) “Person” means a physical person or any other legal person,
5) “Beneficiary” means a student at a public higher education institution pursuing higher education or training and who has entered into an obligation with the concerned institution for the future payment of the cost of his/her education or training and other services.’
6) “Cost-Sharing” means a scheme by which all beneficiaries of public higher education institutions and the government share the cost incurred for the purposes of education and other services.
7) “Graduate Tax” means a scheme by which an amount is deducted from income in the form of a tax to be paid by a beneficiary who has been obliged to share the costs of his higher education.
3. Scope of Application
This Regulation shall apply to students that are newly admitted to an institution beginning from 2003/04 academic year, as well as to students in their second year or above training during the 2003/4 academic year.
4. Beneficiary’s Share and Mode of Application
1) All beneficiaries of public institutions of higher learning shall share full costs related with boarding and lodging and a minimum 15% of tuition related costs. The amount to be shared shall be calculated based on the cost to be incurred at each institution and programme of study and shall be revealed to the beneficiaries at the beginning of each academic year.
2) The beneficiary shall pursue his education after entering a written contract agreement with the respective institution for the future discharge of the amount of cost to be borne by him referred to under Sub-article (1) of this Article. This contract document is a legal document.
3)Any beneficiary who discontinues or completes his education shall be given a document stating the amount owed. The document shall have full name of the beneficiary, address, photo and other relevant information.
4)The cost of education and training shall be revised at least every three years. The Ministry shall enact directives to this effect.
5) Only an Ethiopian national is eligible for pursuing his higher education or training upon the contractual commitment for future payment, in cash or in service, of his share of the cost in the form of graduate tax.
1) Up to 5% deduction of the payable cost shall be made for beneficiaries who pay every year the total cost determined either by themselves or by the support of organizations.
2) Up to 3% deduction of the payable cost shall be made for beneficiaries who pay the total cost determined within the first year of their graduation.
3)Pursuant to directives to be issued by the Ministry from time to time, a beneficiary who volunteered to be trained in certain fields as designated by the government provided that he enter into a contract with the government to work in all places of assignment after graduation for at least three times the time spent in the training.
4.)Beneficiaries who, in breach of their agreement, refuse to discharge their obligation of service, shall be obliged to pay all outstanding cost of their training and education with interests, as per the rate applicable during the time of payment, within five years from the date of breach of their agreement.
6. Mode of Repayment of Shared Costs
1)The beneficiary shall start paying the amount within six months after graduation if earning income, or within a maximum of one year after graduation, in the form of graduate tax of at least 10% of the monthly income of an employee; or amount owed deducted from the yearly income if self-employed,
2)The total amount that a beneficiary is required to pay shall be subject to payment of service fee or interest, and the interest payable shall be determined pursuant to the deposit rate in use at the time of conclusion of the contract
3)Completion of repayment of amount owed by beneficiaries shall, depending on the type and duration of program, not exceed 15 years.
4)A beneficiary who discontinues his education due to any reason shall be required to pay the amount required of him. However, in case the beneficiary discontinues education owing to national call of duty or service, the obligation to pay shall be waived.
5)In case of an employed beneficiary the amount owed shall be deducted from the monthly income of the beneficiary and transferred to the treasury by the employer. However, such deduction shall not exceed 1/3 of a monthly income without a prior consent of the beneficiary as per Article 8( 1) (c) of this Regulation.
6)In case a beneficiary is living abroad as a result of private business or foreign employment, payments due shall be collected as per provision of an additional directives to be issued by the Federal Inland Revenue Authority.
7)A beneficiary who decides to go abroad for more than six months before completing the payment of the cost required of him, shall be made to produce a guarantee for the payment of the outstanding amount.
7.. Obligations of Employers
1.Any employer employing a beneficiary after the effective date of this Regulation shall have the following obligations:-
(a)to request a copy of the contractual agreement entered between the beneficiary and the Institution and a written document specifying the amount to be deducted from a monthly salary.
(b)to forward to the Federal Inland Revenue
Authority list of beneficiaries employed within a period of 3 months;
(c)to deduct, and transfer every month, the amount owed by the beneficiaries as per Article 8(1) (c) of this Regulation and the Income Tax Proclamation No. 286/2002,
(d) If the employee has not produced the required documents as per Sub-Article (1) (a) of this Article or a document issued by the Federal Inland Revenue Authority, to hold one third of the monthly salary of the employee, inform the same to and give solution in a maximum period of three months based on the information of Federal Inland Revenue Authority
2. Any employer who fails to discharge all obligations set forth under Sub-Article (1) of this Article shall be liable for the amount not collected and shall be guilty of an offence for the month payment is not paid in accordance with the Income Tax Proclamation of the country.
8. Obligations of the Beneficiary
1)Without prejudice to provisions of Article 6(1) of this Regulation, a beneficiary employed by any employer has the following obligation:
(a)to inform the full address of his place of work and information pertaining to prior employment
through the employer to the Federal Inland Revenue Authority;
(b) to start paying the amount required of him/her on monthly basis in the form of graduate tax;
(c) to submit the contract document entered as per Article 4(2) of this Regulation to the employer and assist the employer to withhold part of his/ her monthly salary and pay to the Government every month. The monthly payment shall not be less than the sum stipulated in Article 6(1) of this Regulation.
2)A Beneficiary who violates any of the obligations under Sub-Article (1) of this Article and those under Article 6 of this Regulation shall be liable in accordance with the Income Tax Proclamation.
9. Cancellation of Payment Obligation
The unpaid part of the cost of a beneficiary who has been discharging his payment obligation shall be cancelled in the event of death or retirement of the beneficiary.
10. Powers and Duties of the Ministry
Without prejudice to other provisions in this Regulation, the Ministry shall have the following powers and duties:-
(a) to oversee and ensure the implementation of this Regulation
(b) to approve the amount apportioned by higher education institutions from the beneficiaries.
(c) to issue, directives for the proper implementation of this Regulation.
(d) to determine on the substance of contractual document.
(e)to issue detailed directives on the areas and modalities of the cost shared in ways other than monetary .
11. Powers and Duties of the Federal Inland Revenue Authority
Without prejudice to other provisions of this Regulation, the Authority shall have the following powers and duties:
(a)to notify each beneficiary and employer the total
amount of payment to be made by the beneficiary together with the monthly payment;
(b) to follow up, supervise and collect the total amount of payment to be made by the beneficiary;
(c)to create the necessary procedures and organizational set ups/structure for the implementation of the foregoing;
(d)to issue certificate of completion of payment for the beneficiary who fully discharges his/her obligations;
(e) to issue a Taxpayer Identification Number for each beneficiary;
(f) to facilitate for the collection of the graduate tax from beneficiaries employed in regions.
12. Powers & Duties of Institutions
Without prejudice to other provisions in this Regulation, institutions shall have the following powers and duties:
(a) to follow up the implementation of the cost sharing system;
(b)to notify the beneficiary, at the beginning of the academic year, the appropriate amount of cost the beneficiary has to share, and to keep record of all necessary data.
(c) to provide the beneficiary with documents stating the amounts that is to be paid by beneficiaries
13. Effective Dates
This Regulation shall enter in to force starting from the 12thday of September 2003.
Done at Addis Ababa, this 5thdayof September 2003.
Prime Minister Of The Federal Democratic Republic of Ethiopia