The higher education institution is categorised into two types: public and private. Both are supervised by the Ministry of National Education. There are four types of higher education institution: universities, institutes, academies, and polytechnics.
Indonesia's institutions of higher education have experienced dramatic growth since independence. In 1950 there were 10 institutions of higher learning with a total of about 6,500 students. In 1970, 450 private and state institutions enrolled about 237,000 students, and by 1990 there were 900 institutions with about 141,000 teachers and nearly 1.5 million students. By 2009 there were 2,975 institutions of higher education and more than 4.2 million students. Of these institutions, 3 percent were public, with 57.1 percent of the student enrolment, and 97 percent were private, with 42.9 of the student enrolment. Even though government subsidies finance approximately 80 to 90 percent of state-university budgets, universities have considerably more autonomy in curriculum and internal structure than do primary and secondary schools. Whereas, tuition in such state institutions is more affordable than private-university tuition, enabling attendance by students from relatively modest backgrounds, faculty salaries are low by international standards. Lecturers often have other jobs outside the university to supplement their wages.
Private universities are generally operated by foundations. Unlike state universities, private institutions have budgets that are almost entirely tuition-driven. A onetime registration fee (which can be quite high) is determined at the time of entry. Universities with a religious affiliation may receive donations or grants from religious organisations. The government provides only limited scholarship support for students wishing to attend private universities.
Most of the 6,000 foreign students studying in Indonesian universities hail from Malaysia. In particular, they are in the fields of medicine, pharmacy, literature, humanities, Islamic studies and engineering. The majority are sponsored by the Malaysian government. These foreign students are dispersed across Indonesia in almost all public universities such as Universitas Sumatera Utara, University of Indonesia, Gadjah Mada University, Bandung Institute of Technology and also in private institutions such as Universitas Kristen Krida Wacana (UKRIDA).
Indonesian degrees
| Diploma 1 (D1) | Profesional ahli pratama | Associate degree |
| Diploma 2 (D2) | Profesional ahli muda | Associate degree |
| Diploma 3 (D3) | Profesional ahli madya | Associate degree |
| Diploma 4 (D4) | Sarjana sains terapan | Bachelor's degree |
| Sarjana 1 (S1) | Sarjana | Bachelor's degree |
| Sarjana 2 (S2) | Magister | Master's degree |
| Sarjana 3 (S3) | Doktor | Doctoral degree |
Foreign university
Foreign universities can operate in Indonesia, but they are required to co-operate with local universities. A final and binding Constitutional Court has rejected a judicial review proposed by six students to refuse foreign universities to operate in Indonesia.