Higher education institutions can be broadly divided into two groups those which are research-led but also provide teaching and those which are teaching-led but also engage in some research. Interestingly, the best institutions for education, particularly for rapidly evolving disciplines, are actually the research-led universities, simply because the best faculty prefers to work in them. For example, the best places for education in areas like science and engineering are the top research-led universities MIT, CalTech, Berkeley, Illinois, Princeton, Cornell, etc., in US; Cambridge, Oxford, City University in UK: and IITs, IISc, etc., in India.
In India, there are about 3,000 teaching-led institutions, as all of our colleges and many of our universities as well, are in this category. We have less than 50 institutions that are genuinely research-led. Clearly, the challenge in higher education today is to build good quality research-led institutions.
Unfortunately, in our country there is a lack of appreciation about the costs involved in setting up a research-led institution. This may be due to the large number of teaching-led colleges where the costs are significantly lower. In a research-led institute, about two-thirds of the students are undergraduates (UGs) and the remaining are postgraduates (PGs). The UG students are the primary source of fee revenue, as PhD students and many of the Masters students are generally treated as useful resources for the institute and are paid some stipends/fellowships. This pattern holds globally as well as in India.
The running cost for an institute can be approximated through the faculty strength. For each faculty member in such an institute we should have a few Masters students and a couple of PhD students, and one to two staff members. Given that the faculty in such institutes, who are doctorates, will necessarily be paid well, the salary bill will translate to over 30 lakh per faculty members per year. Add to this the non-manpower costs for running an institute including travel, maintenance, electricity, etc: the total cost will be around 40 lakh per member per year (assuming there are no major and expensive research facilities). Such an institute can have about 12:1 UG student to faculty ratio. This means that, for running such an institute, the total cost will be about 40 lakh for each 12 UG students. In other words, the fee will translate to around 3.5 lakh per UG student, just for running the institute.
Add to it the cost of infrastructure and facilities: the capital cost of building a decent campus with good research facilities is at least 20 lakh per UG student this includes hostels, classrooms, labs, recreation facilities, etc., as well as R&D spaces, faculty offices, cubicles for PG students, and accommodation. If this capital is to be recovered from the UG fees, then it will add approx 2 lakh per year per student. This estimate is excluding the cost of land, which when added would escalate the total cost.
In almost all the reputed research-led private universities in the US (e.g. MIT, Cornell, Princeton), despite high tuition fees (of the order of $30,000 per year) UG education is subsidised. They provide these subsidies, which can be to the tune of $20,000 per student per year, through their endowments, government grants, and other resources.
Quality education provided by reputed research-led institutions will be expensive. And, we need many such institutions. A key challenge is to find viable methods of subsidy and strike a balance with fees, so that such institutions can be created and sustained.
(The views are personal.)