Undergraduate education in state universities is free but extremely competitive, limited and standardized. Out of the 321,469 students who sat for the GCE A-Level examination in 2018, around 160,907 students have passed and only around 30,000 get the opportunity to enter State Universities leaving the balance to get admission to a foreign university at a huge cost, or to get admission to a Sri Lankan private university or institute at a moderate cost or to join the unskilled workforce. According to the estimates, about 15,000 take the first and second options where the remaining, due to financial constraints, seek employment.
Admission to private institutions is typically based on GCE A-Level examination results, although admission standards may be less rigorous than at public universities. Given the capacity shortages at public universities, many students apply for private higher education providers. Hence, the private universities can save a considerable amount of foreign currency for the country while addressing the issue of brain drain. Recognized private universities attract students who, having economic solvency would otherwise fly to foreign lands. Private universities will give them the option of studying the desired subjects with the advantage of living with their families and acquaintances in a familiar environment.
In order to address the above issues, the Government has introduced an interest free loan scheme for the GCE Advance level qualified students to pursue undergraduate education at non-state universities.