limited and the aspirations of the population for higher education still ex- ceed the sector's capacities. An increasing cohort of the population is be- coming more affluent and is thus able to pay significantly higher tuition fees than are charged in the public sector. 6 Within the nonstate sector, church-owned institutions pursue different strategies than those owned by private foundations. The former are, in fact, reminiscent of the public sector, having a monopoly over theological stud- ies. The colleges owned by private foundations, however, are expanding fast both in numbers of students and in diversity. They are also attempting new organizational solutions: distance learning, international partnerships, and involvement of stakeholders -- including business partners and mu- nicipal governments. Given strong government control over the higher education sector and effective accreditation arrangements, the emergence of a strong private sector is not risky in terms of quality. Indeed, private initiative will bring competition and dynamism into a conservative academic system. Such ini- tiatives are in keeping with Hungary's reform orientation. NOTES This chapter is based on Hungarian government documents, including Ministry of Culture and Education reports and relevant legislation, OECD reports, journal ar- ticles, and interviews with key policymakers. | 1. | Although we consider the non-state-sponsored activities of state-owned in- stitutions as well as the church-owned institutions as part of the emerging private sector of higher education, this study will strongly focus on the so-called founda- tion colleges. We believe that strategies, state incentives as well as constraints in the development of these schools are fundamental when considering future gov- ernmental options and strategies. | | | | | 2. | The present church higher education institutions were given back to the churches only in the 1990s. | | | | | 3. | During the period under discussion, the exchange rate for one U.S. dollar varied between 170 and 200 HUE The average monthly salary in Hungary varied between $200 and $250, after taxes. | | | | | 4. | This is applicable only to the student's first-degree higher education training. | | | | | 5. | The law states (Paragraph 56/A) that in the case of nonstate universities, the nominee for rector is recommended by the university to the minister of education and then by the minister to the president of the republic, who appoints the rector. In the case of nonstate colleges, the procedure is similar except that the last step (appointment) is the task of the prime minister. | | | | | 6. | As mentioned earlier in the chapter, a new government eliminated tuition fees for first-degree programs in the public sector. | | | | -180- |