STATE EDUCATIONAL GRANTS AND HEI BUSINESS PROCESSES: A METHODOLOGICAL APPROACH

Abstract

The paper investigates state educational grants as a mechanism for targeted tuition co-funding of contract-based studies in Higher Education Institutions (HEIs) of Ukraine, as well as their nexus with HEIs' business processes. The relevance of the topic is underscored by the adoption of the 2026 law, which institutionalizes grants as a permanent funding instrument based on the "money follows the student" principle. The study aims to evaluate the administrative and financial outcomes of the first year of grant implementation, compare their normative parameters for 2024–2026, and advance a methodical approach to modeling tuition affordability and the potential response of HEIs' business processes. The research employs institutional and comparative analysis, descriptive statistics based on official data from the Ministry of Education and Science of Ukraine, standardized scenario calculations, and the specification of a panel econometric model. A four-level approach is proposed, distinguishing between the administrative implementation of the mechanism, the intensity of the pricing incentive, and the dynamics of demand and HEIs' business processes. The incentive intensity is evaluated through the grant coverage coefficient and the residual tuition price. For programs with full coverage, a pricing space is identified within which price increases do not lead to higher expenditures for the student. In the 2024/25 academic year, the grant confirmation rate reached 92.9%, and the reduction in the second payment aligns with the termination of support for 2.2% of recipients. To estimate the causal impact of the grant on applicant choice, a panel model with fixed effects and a regression discontinuity design at the 150 and 170 NMT score thresholds are proposed. The developed approach provides a foundation for further causal evaluation of grant policy, and HEIs and management bodies for monitoring grant coverage and strategic enrollment planning can utilize its findings.