International Comparative Higher Education Finance and Accessibility

The International Comparative Higher Education Finance and Accessibility (ICHEFA) Project is a program of research, information dissemination and networking. The project is looking at the worldwide shift in the burden of higher education costs from governments and taxpayers to parents and students. Directed by Dr. D. Bruce Johnstone, SUNY Distinguished Service Professor of Higher and Comparative Education Emeritus at the State University of New York at Buffalo, and managed by Pamela N.  Marcucci, the project is operated through the Graduate School of Education’s Center for Comparative and Global Studies in Education.

This partial shift of costs – sometimes referred to as “cost sharing” or a part of “revenue diversification” – can be seen throughout the world, as in:

• Mounting tuition fees in both public and private universities in the US and elsewhere.
• Rising costs of student living, especially in urban areas, even where tuition may not yet be a factor.
• The advent of tuition, along with the diminution or even the phasing out of student grants, and the increased interest in student loan schemes throughout Europe.
• The introduction of tuition in China and other nations still holding to some elements of Marxist-Socialist ideology.
• The heavy reliance on private, tuition-supported colleges and universities in much of Asia (Japan, Korea, the Philippines) and Latin America (Brazil, Chile, Mexico).
• The emergence of private, tuition-supported colleges and universities in Russia, China and other nations that until only recently forbade both tuitions and non-state universities, and that guaranteed all students a free higher education.
• The emergence of dual-track tuition policies in public universities throughout Africa, and Central and Eastern Europe whereby a certain number of free university places are awarded by the government and other places are available to qualified, but lower scoring, students on a tuition fee paying basis.
• The continued—often bitter and sometimes violent—resistance to tuition fees in many countries, in spite of the presence of financial assistance, the fact that tuition fees are always far less of a financial barrier than living expenses, and the equity arguments in favor of modest tuition fees.

“Cost Sharing” is supported by the economic concepts of equity and efficiency, as well as by the apparent inability of public revenues in almost all countries to keep up with burgeoning enrollments and rising per-student costs. However, it may be strongly resisted in countries with traditions of free tuition (sometimes constitutionally enshrined), some of which also have no traditions or mechanisms of means-tested financial assistance or of student loans to maintain accessibility in the face of these rising costs.

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A background paper by Dr. Johnstone can be found under the Publications. The policy dilemma of nations struggling with the need to maintain and extend higher educational accessibility under conditions of increasing competition for scarce public resources can be summarized in the following six propositions.

1. Most countries are experiencing a dramatic increase in both the public and private demand for higher education as higher education comes to be recognized as the engine of economic growth and of individual opportunity and prosperity. (This is especially true of those countries still trying to change from “elite” to “mass” tertiary-level participation.)
2. Higher education nearly everywhere–particularly in developing, or low-income, countries and in those countries in transition from command to market-driven economies–is suffering from a severe and worsening austerity. This austerity is a function of: (a) increasing enrollments, as noted above; (b) high costs and a resistance to many measures that might increase the efficiency or productivity of universities; and (c) declining public (taxpayer-based) funding. (The decline in public revenue, in turn, is a function both of increased difficulty in taxation, and of competition from other, oftentimes more politically compelling, public needs.)
3. In light of the above two propositions, national systems and institutions nearly everywhere in the world are turning to some “cost sharing,” or “revenue supplementation,” from students and parents in the form of tuition and of more nearly full-cost recovery from the provision of room, board, and other non-instructional services.
4. In addition to the sheer need for revenue, tuition–even in otherwise “public” institutions–is supported by concepts of equity (the notion that those who benefit should at least share in the costs), efficiency(the notion that the payment of some tuition will make students and families more discerning consumers, and the universities more cost-conscious providers), and responsiveness (the idea that the need to supplement public revenue with tuition, gifts, and grants will make universities more responsive to individual and societal needs).
5. Thus, some increased costs borne by parents and students are probably both inevitable and economically rational. Indeed, the supplementation of higher educational revenues by non-governmental sources–primarily the family–is one of the major recommendations from the World Bank and most other development experts as one important solution to increasingly underfunded and overcrowded universities. We can see the beginnings of tuition and various kinds of fees in such countries as China, Vietnam, India, more and more countries in Latin America and Africa, and even in formerly tuition-free Britain. We see the dilemma of most of Western Europe as well as Russia, East Europe, and the other countries of the former Soviet Union, all struggling with the need for tuition to supplement increasingly inadequate public revenues for higher education, looking for loopholes in their present constitutional guarantees of free higher education. We see a mature, even if uneven, private higher education sector, mainly tuition-supported, in Japan, Korea, the Philippines, Chile, and most of the rest of Latin America, and private higher education sectors emerging in the countries of the former Soviet Union and the rest of Eastern Europe.
6. In the face of these increasing expenses born by students and parents, national systems and individual institutions face the challenge of maintaining higher educational accessibility, especially for poor, minority, rural, and otherwise underserved populations. (This challenge is particularly compelling in light of the increasing income disparities being experienced in most of the countries of the world.) In the US and many other countries, the principle of expanding higher educational opportunity and accessibility is being met, among other ways, with means-tested student financial assistanceand/or student loans or other forms of delayed payment, such as graduate taxes.

What is most problematic about this shift, at least in the developing world and in the nations of the former Soviet Union and Eastern Europe, is that many of these countries may lack (in addition to the enormous affluence of the US) such traditions as:

• the appropriateness of tuition—i.e., that parents and/or students should contribute to the instructional costs of high education, at least to the limit of their abilities;
• the tradition of revealing incomes and assets, honestly, in response to tax laws or requests for the documentation of financial need for the obtaining of student assistance; or
• the tradition of philanthropic giving to higher education, which can build up scholarship funds at colleges and universities, public as well as private.

It is because of these traditions–together with the $143 Billion dollars in student aid and loans (2007-08), most of it “need-sensitive”—that the US, in the face of very high costs of high education, can still hold to the principle that access to higher education, to the limits of a student’s ability and interest, need not be limited by family financial status. In the absence of these traditions, and of the policies and procedures that can emerge from them (which is the condition in most of the rest of the world, and nearly all of the world that is low-income, or “developing”), there is reason to believe that higher education will become increasingly unattainable to all but the affluent. “Financial need” is exceedingly difficult to ascertain and verify, especially in non-Western countries, where private sector incomes may be neither reported nor even recorded (or certainly underreported) and where tax evasion is everywhere prevalent. Whatever parental financial responsibility may exist may be limited to sons, or may be handled by extended families. Sections of the population may subsist on largely non-monetary income, making “financial need” even more difficult to assess. Yet without some way of assessing “need,” either very large segments of the population must effectively be denied access to higher education, or tuition must be kept zero or low for all students—which in light of the absence of alternative public revenue means either that the colleges and universities must limit enrollments (and continue to serve only a small elite), or must be maintained at such levels of overcrowding and shabbiness such that all students may be denied a decent higher education.

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This is the challenge upon which the International Comparative Higher Education Finance and Accessibility Project attempts to shed some scholarly light. The Project solicits contributions in the form of essays or short research articles either for publication as monographs or for inclusion in the website. Directions and a style guide and more about the Project and publications in multiple languages appear in the ICHEFA Project website: http://www.gse.buffalo.edu/org/IntHigherEdFinance