Higher Education Finance and Access in Comparative Perspective

1
Higher Education Finance and Access in
Comparative Perspective

• D. Bruce Johnstone, SUNY Buffalo
• Expanding Access Lessons from Abroad
• ACE Annual Meeting February 2007

2
Financial Problems of Higher Education Worldwide

• Trajectory of costs (per-student and total)
  increasing faster than revenues (at least public)
• Austerity overcrowding, deterioration of
  quality, loss of faculty morale
• Tuition fees and other expenses rising
  (inflation)
• Diminishing relative priority of H. Ed.
• Diminished confidence of governments in higher
  education especially in faculty management

3
Limitations on Higher Ed. Access Participation
Worldwide

• Losses at middle and secondary levels
• Limitations in higher educational capacity
• Limited free or low fee places (dual tuition)
• Persisting link between measured ability
  aspiration and family class / privilege
• Losses or freezing of grant aid
• Limited student loans

4
The Hazards of Generalization Countries vary
greatly in

• Per-capita GDP
• Rate of Growth of GDP
• Capacity, cost-effectiveness, and progress-ivity
  of additional taxation
• Population growth
• completing academic secondary school
• Capacity and diversity of post-secondary options

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hazardous variations continued

• Variations in the political and cultural
  acceptability of
• Tuition fees
• Private higher education
• Parental financial responsibility for
  post-secondary education of children

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The Perfect Storm Financial Limitations on
Accessibility

• Low GDP per capita and low rate of growth
• Very low tax capacity Marginal taxation
  cost-ineffective, regressive, and detrimental to
  growth
• Substantively politically compelling queue of
  competing public needs ahead of higher education
• Rapid increase in birth rate h.s.
  participation rate ? very rapid growth of higher
  ed. aspirants
• Political culture of entitlement and fear of
  student movements great resistance to
  cost-sharing
• Limited capacity for targeting or for lending

7
Things are Easy

• Substantial additional progressive tax capacity
• Substantial tuition-dependent private sector
• Acceptance of appropriateness of tuition fees and
  philanthropy in public sector
• Substantial and diversified H Ed. Capacity
• Near saturation of participation ?
• low rate of growth of secondary school leavers
• Well-developed systems for grants and loans

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US Comparative Advantages (Why we get the more
higher education capacity for the tax )

• Diversified system (multiple entry points
  horizontal transfer possibilities)
• Substantial private sector
• Acceptance of parental financial responsibility
  for childrens higher ed.
• Tradition (and partial subsidization) of
  philanthropy public as well as private

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US Comparative Advantages (Why we get more higher
educational access for the tax )

• Financial Assistance 134 Billion 2005-06
• Ability to target assistance (on decline)
• Abundant loans, minimally subsidized
• Ability to tap private capital markets for loans
• Capacity competition client seeking
• Recognition of link between privilege and
  measured academic readiness (GPA / SAT)
• Recognition that race ethnicity matter
  (although on decline)

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But We Can Learn

• Better relate repayments to level of income
  (Australia,UK, Canada, the Netherlands)
• Better control of loan defaults through
  appropriate use of co-signatories
• Institute bi-lateral multi-lateral agreements
  on student loans
• Assure greater transparency on institutional
  quality

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Summary Finance and AccessFour Worldwide Trends

• Cost-sharing other forms of revenue
  Diversification
• Sector Diversification
• Budget Reform / Autonomy
• Privatization
• Others modularizing curriculum, shortening
  time conforming 1st degree, enhancing
  internationalization,

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For More Information

• For additional information, country studies, and
  papers on international comparative tuition and
  financial assistance policies, visit the Website
  of the International Comparative Higher Education
  Finance and Accessibility Project
• http//www.gse.buffalo.edu/org/IntHigherEdFinance
• Bruce Johnstone
• University at Buffalo, dbj_at_buffalo.edu