Diverse Conversations: Issues and Trends in International Higher Education Financing

Have you ever wondered how higher education is financed in other parts of the world? No matter what country you choose, you will find that the topic of financing higher education is a contentious one. Over the last decade, there has been a worldwide shift of the burden of higher education costs from governments and taxpayers to parents and students. This is much to the chagrin of parents of course. To find out more about current trends in international higher education financing, I sat down with Dr. John C. Weidman, Professor of Higher and International Development Education at the University of Pittsburgh. Without further ado, let’s begin the interview.

Q: Historically, how has financing higher education internationally differed from the American model?

A: The main differences stem from variations in the role of national governments with respect to education. In most countries, there is a national ministry that has overall responsibility for education. In some cases, there is a separate ministry for higher education but it still tends to be a national entity. Countries also vary in level of funding provided to public higher education institutions. In most countries other than the USA,

In the federal system of the USA, education is the responsibility of the states so the influence of the national government is much more limited than in most countries. In the USA, responsibility for covering the cost of higher education has been shifting continuously to the individuals benefitting, namely students, through a variety of loan schemes. At the same time, states have been reducing their contribution. Consequently, there is considerable variation by state in the types and costs of available higher education. In the USA, the most highly regarded and hence most difficult for students to gain admission are private. It is just the opposite in most other countries in the world, with public universities having the highest status.

Countries differ in their approach to meeting increasing demand for higher education. Three main ways are expanding the numbers of government-funded institutions, enabling the expansion of the private sector without significant government investment, and various combinations of public and private expansion. One reflection of such differences is the proportion of students attending private as opposed to public (government funded) institutions. According to data collected by the Program for Research on Private Higher Education (PROPHE) at SUNY-Albany, this varies from less than 10% in several European countries (e.g., Austria, Germany, Czech and Slovak Republics, Ireland, Italy, Spain), Australia, and South Africa to more than two-thirds in Brazil, Chile, Indonesia, Japan, South Korea, and Taiwan. In the USA, about 26% of all undergraduates are enrolled in private higher education institutions. This is actually below the worldwide average of 31%. All of the countries with very high private enrollments regulate student fees much more than the USA.

The third alternative is to charge higher tuition to less qualified students attending government-funded institutions. In Kenya, for example, the scores on the national secondary school leaving exam required for students to receive government scholarships to attend universities have been slowly increasing. Students whose scores to not reach the grade threshold are still eligible for university admission, but they have to pay tuition at an unsubsidized rate for “Privately Sponsored Students Programs” (PSSP).

Q: Increasing the price of tuition is usually proposed as a way to guarantee quality in higher education. Does the seemingly annual escalation of tuition worldwide make sense?

A: This notion is very possibly driven by the mistaken belief that the very high tuition, elite, private universities in the USA (e.g., California and Massachusetts Institutes of Technology, Harvard, Yale, Princeton, and Stanford) that are placed in the top tier of most international rankings are the inevitable model for quality worldwide. Much lower tuition (i.e., highly government subsidized) institutions (e.g., University of California-Berkeley and the University of Michigan in the USA, Oxford and Cambridge in the UK, Tokyo University in Japan, Seoul National University in South Korea) are also highly ranked. Quality is a function of skills and academic productivity of faculty as well as institutional resources. Escalation of tuition is primarily a function of a) the increasing costs of maintaining institutional capacity (foremost among them faculty salaries and benefits along with infrastructure such as classrooms, libraries, laboratories, etc.), and b) a pattern of decreasing government funding. Unfortunately, ways of reducing costs in higher education are not necessarily related to maintaining quality.

Q: Loan systems usually mirror changes in tuition. What are the major trends in student loans internationally?

A: The main trend internationally is to reduce the amount of direct government funding of loan schemes. This means developing better ways of collecting payments on government provided loans so there is a revolving fund that does not require huge annual investments. Another trend is moving responsibility for student loan schemes from the government to the banking sector, though often not without some type of subsidy.

Q: Are there countries that you think do an exceptional job of promoting quality higher education, with access?

A: In both South Korea and Japan, virtually all secondary school graduates attend higher education. Both countries have built strong private higher education sectors to absorb the huge demand for enrollment rather than expanding public higher education. In both countries, the private higher education sector is strongly regulated, with government limits on the amount of tuition that can be charged and strong monitoring systems to make certain that acceptable levels of quality are maintained.

Q: As you look at worldwide trends in financing higher education, do they create opportunities for U.S. higher education?

A: In my view, the most important trend driving higher education finance worldwide is the increasing demand for higher education, both from prospective students and from governments aspiring to stimulate national economic development by increasing the numbers of highly educated people entering their workforces. If governments are unable to meet excess demand for admission to higher education institutions through expansion of publicly funded institutions in their respective countries, students and their families may seek opportunities in other countries. In China, for example, there are only places for about 20% of the age cohort seeking higher education admission. As a consequence, many higher education institutions in the USA (as well as other countries) have begun actively recruiting Chinese students. For public higher education institutions in the USA that charge a higher tuition for non-resident students, this is a potentially significant source of revenue. It also provides opportunity for institutions faced with decreasing enrollments due to population shifts in the USA to increase enrollments. In addition, many countries are funding scholarship programs for graduate students to pursue degrees abroad, especially in fields in which their own universities have limited space and/or quality. Those institutions recognized in widely accepted international rankings (e.g., Times Higher Education, Shanghai Jiao Tong University) as being in the highest quality tiers will continue to attract significant numbers of international applicants.

Well, that concludes my interview with Dr. Weidman. I would like to thank him for consenting to this interview and for his contributions to the field of higher education and humanity in general.



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