The main purpose of this study was to investigate the impact of cost sharing scheme in enhancing revenue generation in public higher education in Ethiopia in order to improve the quality of the teaching and learning environment. Furthermore, the study has attempted to assess problems/challenges experienced by students as well as other government bodies related to cost sharing scheme. To this effect, both quantitative and qualitative research approaches were used. The participants for the study were students and instructors from Addis Ababa and Adama universities. A total of 1048 students and 123 instructors completed and returned questionnaires. To obtain qualitative data interviews were conducted with selected graduates from the two universities who went through the cost sharing scheme, the offices responsible for cost sharing at Addis Ababa University, the Ethiopian Revenues and Customs Authority as well as the Ministry of Education. Appropriate statistical tools were used for data analysis.
The finding of the study revealed that at the undergraduate level all students from different socio-economic backgrounds enter into an agreement for cost sharing. Students pay their cost of boarding, food and medicine and share 15% of the tuition fee. The tuition fee includes the cost incurred on instruction as well as on other expenses except boarding, food and medicine. Beneficiaries either pay their cost sharing in terms of services or upfront payment or a 10% graduate tax which is considered as high as compared with many African countries. Students get different kind of services as part of their cost-sharing scheme. The majority of the students get boarding and food services. Few students use food and boarding services. Students who opted either for only food or boarding accumulate less debt at the end of their college education than those who use both food and boarding services. Most students in both universities had either high or moderate expectations concerning the services when they joined these universities. However, most of the students rated the quality of various services they get as low compared with their expectations. Furthermore, it was also found that the government does not re-channel the collected revenues from the graduates to their respective institutions to augment yearly allocated budgets. Hence, it is recommended that concerned government bodies should tackle the problems associated with cost sharing in HEIs.