Israel's once-public higher education system has come to rely heavily on private funding, a new report by the Adva Center states.

According to the report, private funds account for 41 percent of the combined budget for higher education institutions in Israel. "Unless a genuine change occurs, Israeli education is expected to lag behind other Western countries," the report warns.

The report, titled "Living the moment: on growth, inequality and future development in post-intifada Israel," puts Israel among the countries whose higher education systems are most dependent on private funding.

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According to the report, the higher education system has suffered a major crisis in recent years that can be traced back to "a governmental policy to reduce funding for public services in favor of economic growth."

The authors of the report acknowledge that this policy resulted in a financial boom. However, they add that "it constituted a profound blow to higher education, health and welfare services."

The Organization for Economic Cooperation and Development (OECD) actually uses the degree to which institutions for higher education rely on private funding as a criterion to measure their progress. OECD data demonstrates that many member states, including Turkey, allot their higher education systems more than Israel's 59 percent of funding.

The report warns that higher education's increasing reliance on private funding might result in a drop in the overall education level. These warnings can also be seen in OECD forecasts that elementary school students in Israel are expected to complete only 15.7 years of schooling - 1.7 years less than the OECD average.

This worrying trend is expected to widen, according to the report, if the projected recommendations of the Shochat Committee for higher education reform are implemented. The committee is expected to recommend an increase in tuition - which constitutes more private funding - in order to increase academic budgets.

Last year already saw a drop in the number of applicants for a bachelor's degree. In terms of the percentage of the population with bachelor's degrees, Israel is ranked 17th out of 25 Western countries. "If Israel wants to become a high-tech power, these numbers must increase rather than decline," the reports states.