Tallinn University of Technology (TalTech) Rector Tiit Land said on ETV's "Esimene stuudio" talk show that the government has yet to pay out the €40 million promised to universities — funding necessary for their continued operation.

"At this point, we're short about €40 million of the amount that was promised and agreed upon for a four-year period. The agreement was for €130 million and we're receiving only €90 million. This can be seen in different ways, of course, because when we talk about funding, we don't want to give the impression that rectors are constantly going around with outstretched hands asking for money because we're broke," Land said.

He emphasized that the missing funds are not new money being requested, but rather a previously earmarked sum that the state had already allocated for universities.

"This funding stems from a structural deficit that's been growing since around 2011 or 2012 when for six years in a row higher education spending was effectively frozen. If you adjust for today's value, in 2010 the average salary was just under €800 and now it's €1,600 — double. That aside, the agreement was made and €40 million of that remains unfulfilled," Land explained.

The rector stressed that a much bigger issue is that universities are now taking on long-term obligations through administrative agreements, despite knowing that starting in 2027, higher education spending is set to be frozen again — amounting to a nominal cut. At the same time, the number of young people entering universities is rising.

"We're committing to long-term obligations and that's the real issue — we currently have no financial backing or agreement in place," Land said.

He acknowledged that the government's education strategy includes reasonable goals, but as the need for training increases, so does the need for funding.

"The education strategy calls for 45 percent of each age cohort to hold a higher education degree. Basic arithmetic tells us that if more young people enroll, there will be more students and that's where the increased funding need comes from. We're not saying, 'give us more money' — we're saying training needs are growing," he clarified.

What most frustrates universities, Land said, is the labeling of the funding allocated to them.

"When people ask what we need this €90 million for, which we've received over four years, it was clear from the start that universities were unsustainable in their ability to pay competitive salaries to rectors under the previous conditions. If the situation were different and the ministry proposed additional funding with specific designations — say, to train more doctors, engineers or veterinarians — that would be understandable," he said, adding that the state has currently opted not to label the funding.

According to Land, the state also can't dictate everything a university does, as higher education institutions have autonomy and academic freedom.

"Academic freedom means the right of a lecturer or researcher to decide independently which methods to use in teaching or research. The state cannot dictate how someone teaches. The broader issue is autonomy — yes, the state has the right to express expectations through funding and does so. Administrative agreements are signed with universities, laying out areas of responsibility and specifying which fields should admit more students and which fewer over a three-year period, and this has long been the case. The real concern is over prohibition. Again, universities are autonomous within the law. They have the right to admit students in any field for which they are accredited, and Estonian universities have been successful in that," Land said.

Discussions between universities and the government are ongoing regarding performance-based contracts. While the focus is currently on the content, Land said the real issue is financial.

"It still comes down to money. Administrative agreements are for three years. The 2026 budget is more or less adequate, given the current context of spending cuts, but the major problem lies with 2027 and 2028 — the second and third years of the agreement. If we commit to increasing enrollment in fields like engineering or information technology, those are very expensive programs. Especially engineering, and those costs carry over," he said.

In recent years, the government has made significant efforts to encourage more students to attend universities of applied sciences. But according to Land, there's no financial difference whether a student earns a bachelor's degree or a professional higher education degree.

"The difference isn't between types of institutions or between applied and bachelor's degrees — it's about the fields of study. The state conducted a study using a full-cost model to calculate the cost of a bachelor's degree versus professional higher education and master's programs. The differences weren't between institutions but between disciplines. The study showed that bachelor's programs are, on average, cheaper than professional higher education programs. A bachelor's program can cost anywhere from €3,300 to €8,900, while applied programs range from €4,200 to €14,000. So really, the difference comes down to expensive and inexpensive fields," Land said.

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