MEASURING FINANCIAL SUSTAINABILITY OF PRIVATE HIGHER EDUCATION INSTITUTIONS

Currently, one of the main priorities of the development of the higher education system is ensuring the quality of education. As it is noted in "Standards and Guidelines for Quality Assurance in the European Higher Education Area", developed by the European Association for Quality Assurance in Higher Education (ENQA), institutions should ensure the availability of sufficient, relevant education resources. At present, there is no single methodology for assessing the financial provision of educational services supplied by private commercial companies in Latvia. The aim of this paper is to define a set of indicators for assessing the financial sustainability of a private higher education institution (PHEI). The author presents the results of the financial sustainability analysis (based on such ratios as leverage, debt-equity, liquidity, etc.) of Latvian PHEIs and suggests: 1) indicators most suitable for assessing sustainability of an educational institution; 2) permissible range of these indicators recommended for Latvia and methodology for their aggregation. The developed methodology may be recommended to national committees of quality assessment for accreditation procedures of higher education institutions (HEIs) and study programmes. In addition, it will allow to harmonise information on the use of financial resources in preparing self-assessments and other reports by HEIs. The novelty of this research consists in the development of the system of indicators specific for assessing the sustainability of such private enterprises, which provide higher education services and are controlled and regulated by the state. The author's contribution is in substantiation of the thesis that a private HEI should be viewed not as an ordinary economic subject, but as a socially significant business entity that fulfils the requirement of the society to educate high-quality specialists.