Universities were allowed to award PhD degrees, but the old German system of habilitation whereby a university board determines whether a PhD holder is sufficiently qualified to be deemed a professor was reestablished. The Academy of Sciences was given the right to award a doctor of the academy degree. But persons who pass the university habilitation do not need the Academy of Sciences doctoral degree, and those who hold the Academy of Sciences doctoral degree do not need the university habilitation. Zalai is convinced that the solution to this impasse is the establishment of a PhD degree with standards high enough to judge the scholarly capacity of younger professors. The market can then measure the value of professors and researchers in the later stages of their careers.
Universities also face major financial problems.
During the Communist era, education was under-financed, partly because there was no incentive to increase educational opportunities and partly because of the emphasis on industrial development and other economic issues. As a result, Hungarian universities have under-developed libraries and technical facilities and poorly paid faculties. Low salaries were less of a problem in the Communist era when the prestige of being a professor compensated for the small salary, and professors gradually grew accustomed to the necessity of earning about half of their income from other sources. Since 1989, however, new, more lucrative opportunities in areas such as economics and management have reduced the universities' capacity to attract and retain good faculty. In addition, many professors have left to go into politics and administration.