The object of research is a development of higher educational institutions. The purpose of research: to define basic directions for improving the development of higher education system in Ukraine based on the analysis of social and economic aspects of higher educational institutions functioning in conditions of market economy formation. Methods of Research: The theoretical basis of researches is the economic theory, social policy, education economy, marketing. The basic methods of research: balance, economic - mathematical, settlement - constructive, comparative, statistical, graphic and others. The information basis of research were official statistical editions of the State statistics committee of Ukraine, annual reports of the Ministry of Education and Science of Ukraine, legal acts of Ukraine on questions analyzed, foreign and domestic sources, scientific publications. Theoretical and practical results: it is established, that at present stage of economic development multifunctional character of h igher educational institutions activity which is defined by intensification of human potential formation processes of and by deepening of market mechanism of managing is formed; features and structure of relations in the system of higher education are determined; the essence of modern structural shifts in financing higher education is highlighted, taking into consideration extra-budget activity of higher educational institutions of Ukraine, tax privileges and additional sources of financing; it is revealed, that for overcoming contravential tendencies in the development of education, it is necessary to conduct consistently reforms of the economic mechanism of higher schools functioning with the purpose of strengthening their responsibility for quality of preparation and employment of the staff; expediency of crediting of education is proved; introduction of material encouragement coefficient for a separate educational institution considering the size of extra - budget receipts is recommended; methodological approaches, concerning the expansion of educational services nomenclature and formation and stimulation of demand for them are developed. A degree of implementation. The basic conclusions formulated in the dissertation, were reported at the International scientific - practical conferences " Problems of economic integration of Ukraine in the European Union: the theory and strategy" (Yalta - Foros, September 23-24, 1996); "Formulation of financial system of Ukraine and a problem of its stabilization ". (Lviv, the Lviv State financial and economic institute, November 21-23, 1999г.); " Financial levers of economic growth of Ukraine at present stage " (Chernovtsy, Chernovtsy State financial and economic institute, October 26-27, 2000). Materials of dissertation research were used by the Ministry of Education and Science of Ukraine in the process of preparation draft budget 2001.(Certificate from 20.07.2000 p.), Lviv State financial and economic institute in the process of development of the me asures directed to increase the demand for its educational services when teaching the courses "Budget system"," STA Control of enterprises activity", "Marketing" (Certificate from November 22.11.2000) and "Public finance", "Tax affairs" in the Ternopil Academy of national economy (Certificate from September 12.09.2000). Results of research were transformed into concrete proposals and are recommended for practical use by the Cabinet of Ukraine, the Ministry of Finance of Ukraine, the Ministry of Education and Sciences of Ukraine, the interested scientific organizations during the development of higher education development strategy. Sphere of application: economy of labor, social economy and policy, education.
