Iryna Degtyarova

Despite positive transformations in higher education in Ukraine since 2014 when a new Law was introduced, the system of public funding still remains a highly centralized and strongly budgetary dependent based on the state planning methods, which in the situation of lack of resources becomes more imbalanced and inefficient.
The current system of allocation of the “state order for training the specialists with higher education” does not ensure an equal and fair competition among top 10 universities and the rest, especially regional, and the system cannot guarantee state-funded places to all applicants with high results of the External Independent Testing exams. At the same time, only a small share of graduates work on the specialty they acquired. The situation on the labor market does not encourage graduates to be employed in public institutions, which is harmful for the public sector of economy, especially in the regions. It proves that the system of distribution and allocation of government funding between higher education institutions in Ukraine needs urgent reforming.
The objective is to analyze the current system of higher education funding in Ukraine in its national dimension and local perspective, and to develop proposals for its improvement, considering the selected good practices and using the following methods: literature analysis, method of retrospective analysis to research budgetary expenditures, determining the Net Present Value for calculating the government cost. Finally, a feasible proposal to reform the mechanism of public higher education funding was developed.