How higher education is funded across the South Caucasus region

Georgia has unveiled a new funding model for public universities, highlighting the different ways higher education is financed across the South Caucasus. While Georgia, Azerbaijan and Armenia all provide state support, their funding systems differ significantly.

Government spending on higher education

According to a 2023 World Bank report, public spending on tertiary education remains relatively low across South Caucasus. According to the report, the average EU country spends around six times more on tertiary education than Azerbaijan and around eight times more than Georgia and Armenia.

In the region main source of revenue for universities is tuition fees. They account for around 75-80 per cent of university income in Armenia, 75-95 per cent in Georgia and a similar share in Azerbaijan.

Scholarships are generally awarded based on academic performance, meaning many students with average results pay tuition fees. As a result, around 85 per cent of students in public universities in Armenia and Georgia pay tuition, compared with 61 per cent in Azerbaijan.

Georgia introduces a new university funding model

Georgia's public higher education system is primarily funded through a student voucher scheme, with state funding allocated according to students' performance in the Unified National Examinations (UNE). Students with the highest scores receive full tuition coverage, while those with slightly lower results may qualify for partial scholarships.

According to the World Bank, public spending on tertiary education accounts for around 0.3 per cent of GDP, while tuition fees provide roughly 75 per cent of funding across the higher education system.

While public universities receive state support through student-based vouchers, private institutions do not receive direct government funding and rely largely on tuition fees and private sources of income.

Georgia's Minister of Education, Science and Youth Affairs, Givi Mikanadze, has unveiled a new funding model for public universities that will take effect in 2027.

Under the new system, the state will divide tuition funding into two equal components: a guaranteed component and a merit-based component, each covering 50 per cent of a student's annual tuition fees.

The first two semesters will be fully funded by the state. From the third semester onwards, students must earn at least 80 per cent of the required academic credits from the previous semester to continue receiving full state funding.

Students who do not meet the requirement will still receive the guaranteed 50 per cent of their tuition from the state and can regain full funding in subsequent semesters by meeting the credit threshold.

The reform marks a shift from Georgia's long-standing tuition voucher system towards greater direct state funding for public universities, while introducing academic performance requirements for students to maintain full tuition support.

Azerbaijan’s higher education funding system

Azerbaijan's public spending on education accounted for 3.66 per cent of GDP in 2023. The country's higher education system comprises 51 institutions, 40 of which are publicly funded.

Public higher education is not tuition-free. The government covers tuition fees for students from disadvantaged backgrounds, those admitted to priority programmes and applicants who achieve the highest admission scores in the national entrance examinations. In 2025, 48.8 per cent of newly admitted students were funded through the state budget.

Government financing is based on a state order and follows a per capita funding model, under which funding is allocated according to the number of state-funded students enrolled.

Admission to both state-funded and tuition-paying places is determined through competitive national examinations administered by the State Examination Centre.

Students also have access to government-backed student loans. Standard loans carry an annual interest rate of 6 per cent, while social loans with a 2 per cent interest rate are available to students from vulnerable groups.

The government also awards academic stipends and named scholarships. In 2025, 102 students with the highest university entrance scores received the President's Scholarship of $205 per month.

Separately, Azerbaijan has expanded support for overseas education. Under a state programme launched in 2021, the State Oil Fund had financed the studies of 1,630 students abroad as of March 2026, including 359 students admitted to universities ranked among the world's top 10.

Armenia’s higher education funding system

State spending on higher education in Armenia accounts for just 0.54 per cent of overall government expenditure.

Financial support is provided through a combination of merit-based and need-based grants, which fully or partially cover tuition fees. Students may also receive state stipends, subsidies to help cover interest on student loans, and accommodation support for those coming from remote regions.

Despite these support mechanisms, only 16 per cent of students receive merit-based or need-based grants. State stipends are awarded only to students with outstanding academic performance, meaning the majority of students do not qualify for this form of assistance.

Overall, just 16.6 per cent of students receive any type of state support, while only 0.6 per cent are provided with dormitory accommodation.

Students who are not covered by state grants are generally required to pay tuition fees themselves. Annual tuition fees for Armenian citizens range from $500 to $5,625, depending on the university and programme.

Read more:

• UNESCO says 113 countries spend more repaying debt than on education
• India's Cockroach movement ends protests after education minister resigns
• South Caucasus seen as strategic bridge between Europe and Central Asia

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Azerbaijan Georgia Armenia Caucasus South Caucasus education Funding