Increasing costs of running educational institutions and funding educational programs, coupled with decreasing government subsidies to support such costs, have made privatisation and marketisation of higher education a common phenomenon throughout the world. The article presents the development of this trend in Indonesia utilizing two recent government regulations: Badan Hukum Milik Negara (BHMN/State Owned Legal Institution) law of 1999, and Badan Hukum Pendidikan (Educational Legal Institution) law of 2009. Three main criticisms to the regulations include impartiality towards low-income students, the government’s reduced responsibility and commitment to education, and commercialization of public universities. The article argues that the regulations and their main criticisms have failed to address the underlying causes to educational inequity and the lack of emphasis on the impacts of privatisation and marketisation on academic values and purposes of higher education. The article emphasizes the need to revisit the purposes of higher education, to reinforce academic standards and values, and to strengthen the teaching profession.
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