Known for its vibrant culture and beautiful landscapes across more than 17,000 islands, Indonesia is a nation on the rise, having recently been elevated into the category of upper-middle-income country by the World Bank. Poverty, however, while declining each year, still impacts millions of Indonesians today, with 8.57% (24 million) of the population in poverty and 24.42% (68 million) reported as vulnerable to poverty. Reform in higher education in Indonesia hopes to make an impact to reduce poverty, bolster economic and social mobility and promote economic growth.

Challenges in Indonesian Higher Education

Higher education in Indonesia is a large and complex system made up of thousands of institutions, including public and private universities, community colleges, polytechnics and more, offering a wide range of programs. However, as a means for impactful economic change, its higher education system faces considerable challenges. Regional access inequities limit many in Indonesia’s large population to few options for a post-secondary education, as most institutes concentrate in the country’s most populous area, such as Java. For example, Jakarta’s 12% enrollment ratio eclipses 11% in smaller populations like Bangka Belitung. A growing private sector also means that more often than not, poorer students with these limited options end up paying more for a lower-quality education.

With an expansion in access comes the challenge to maintain quality and ensure students are graduating with the knowledge and skills needed to successfully join the job market. Yet, while enrollment is currently expanding, graduate unemployment and underemployment rates are high. This need for a stronger link between program subjects and quality and current workforce needs has barred higher education in Indonesia from a better international reputation and rank, and created a challenge in creating meaningful economic change.

Reforms Underway

Recent studies have highlighted education to be a crucial key in reducing poverty and inequality in Indonesia, as well as the value of knowledge as an economic resource. An investment in improving education equips individuals with better knowledge and skills, making them more productive, effective and relevant members of the workforce and Indonesia is making the investment.

In 2025, Indonesia’s Ministry of Higher Education, Science and Technology identified three key areas for higher education development: “strengthening institutional autonomy, promoting impactful research and innovation and emphasizing science and technology for sustainable socio-economic transformation.” These focuses aim to prioritize quality, consistency and stability in Indonesian higher education and pave the way for innovation and, in turn, economic advantage and employability for students. A more autonomous higher education system can better respond to local and national needs. Likewise, encouraging innovation and targeted research helps address Indonesia’s most urgent challenges, from poverty and inequality to sustainability. An increased focus on science and technology will also ensure that academic programs align with labor market demands, thereby improving graduates’ employability and contributing to broader economic growth.

Improving Accessibility To Higher Education in Indonesia

Apart from just improving higher education is ensuring it is accessible to those it can impact the most, putting equity, opportunity and accessibility for poorer students in Indonesia as another focus in reform. A new Equity and Access policy is calling on all higher education institutions to ensure at least 20% of their newly admitted students are of a low socioeconomic status. Programs such as the Smart Indonesia Card (KIP), a government program that provides financial assistance to cover tuition fees and living expenses for low-income students, will also be continuing as a great tool for students on their educational journey and in the pursuit of poverty alleviation. These efforts are designed to ensure that education becomes a meaningful lever for poverty alleviation, providing not only knowledge but the chance to thrive.

– Jannah Khalil

Jannah is based in Sacramento, CA, USA and focuses on Good News and Technology for The Borgen Project.

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