Assessing the Impact of Indonesia's Project-Based Sukuk Financing Mechanism on Higher Education: Student Enrolment, Learning Quality, and Institutional Cash Flow

This study assesses the impact of Indonesia's Sovereign Sharia Securities Project-Based Sukuk (SBSN-PBS) as a financing mechanism for public higher education institutions (HEIs). Introduced in 2015, SBSN-PBS was designed to address government fiscal constraints by mobilising Islamic finance to support the development of academic infrastructures in public HEIs. The research focuses on three key dimensions: student enrolment, quality of learning environment, and the effect on HEI's cash flow. A mixed-methods approach was employed, combining quantitative and qualitative data from a survey questionnaire in 91 public HEIs and 18 focus group discussions involving a total of 49 public HEIs. Data were collected in 2021, during the COVID-19 pandemic, which introduced contextual challenges that may have influenced infrastructure utilisation and institutional operations. The findings indicate that SBSN-PBS contributed to increased student enrolment and enhanced institutional performance, including improvements in accreditation status, average GPAs, study durations, and graduate competencies. Additionally, SBSN-PBS provided short-term financial relief to public HEIs, partly through increased tuition revenue. However, the experience of the pandemic highlights that the full benefits of SBSN-PBS may not be realised without alignment to evolving learning modalities, such as hybrid and online education. The study concludes with policy recommendations to strengthen the effectiveness and adaptability of SBSN-PBS as a strategic financing instrument for higher education development.