Budget Deficit and Wastage Cost in Higher Education: The Cost of Internal Efficiency in Damghan University of Basic Sciences

Financial crisis in higher education has become worldwide in the last two decades. It has affected the development of higher education in the public sector. In many countries, serious efforts has begun to pull in the people's contribution especially private sector investment in higher education. More r contribution for the payment of educational expenses is required f om the demand part, being the students and sponsers. Literature focuses on tuitions to cover pai1 of the financial deficits of state universities and public higher educational institutions. Yet, little has been said about the role of wastage in budget deficit. The present case study is trying to show the role of wastage caused by dropouts and repetitions in budget deficits of four year undergraduate programs of Damghan University of Basic Sciences during the decade of 1371-80 (1992-2001 A.D.). The population under study involved all 1381 full time students registered during the decade under study. While the total of 10950 credit hours of repetition has left a remarkable wastage cost for the period under study, a range of% 10 - 30 of current budget per year could be saved and spent more logically it the cost of wastage paid by the students who actually caused the wastage. The study leads towards some recommendations for improving the internal efficiency of university administration at the local level as well as implication for policy making at the national level.