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Introduction
The modern period of higher education in Ethiopia commenced with the establishment of Trinity College with 21 students and 9 teachers on 20 March 1950, which 8 months later changed its name to the University College of Addis Ababa (UCAA), (Wagaw, 1990). UCAA became Haile Sellassie I University in 1961 and Addis Ababa University after the abolition of the monarchy in 1974 (Wagaw, 1990). Currently, there are 22 public universities and 10 additional new universities are under construction in the Ethiopian higher education system. There are also several higher education institutions (HEIs) under the ownership of different government ministries and private or non-government organizations.
The first comprehensive higher education reform policy was adopted in 1994 with a view to enhancing the education sector as key to the socio-economic development of the country. The policies mainly stress the introduction of financial diversification by HEIs, including income generation and cost-sharing by students.
Financing higher education in Ethiopia has always been the responsibility of the central government. Since 1950, students enroled in public universities of Ethiopia have enjoyed free education, free medication, room and board, and even the provision of allowances to cover living expenses and academic amenities such as textbooks (Wagaw, 1990). This situation continued until the end of 2003 when higher education an unprecedented expansion and consequently the education budget increased to the extent that the government could not afford to remain the sole financier of education in the country (Ministry of Education [MOE], 2002).
The increasing demand for higher education combined with the necessary financial stringency of institutions and national governments has led to different policy initiatives that involve the reallocation of resources for different and competing social services, including, inter alia , education, health services and infrastructure. Among the many policies that have been put in place is the introduction of cost-sharing, deferred payment of loans and pressure on universities to diversify resources to generate alternative sources of income (Johnstone, 2004).
According to Council of Ministers, higher education cost-sharing Regulation No. 91/2003, the main objectives of the cost-sharing policy in Ethiopia higher education include supplementary revenue, maintaining and enhancing access to higher education, addressing equity in terms of opportunity in higher education and turning students in to 'customers'. This article will try to...