Financing Higher Education in a Global Market

Sound Bite

This textbook discusses various approaches to the financing of Higher Education as implemented in countries from the US to Thailand, and analyzes the effects of different funding policies on different cohorts of students. The book is geared to university programs, graduate seminars, and college/university administration personnel concerned with the high cost of tertiary education, especially tuition pricing and student aid, and how higher education finance policy affects access to colleges and universities.

About the Book

From Austria to India, university administrators and public policy makers are grappling with the high costs of higher education. Comparing the models by which higher education is funded in the United States and seven other countries, developed and developing, the chapters of this textbook help identify effective financial strategies to meet fast-evolving demands.How can each nation and each institution achieve the right balance between quality and quantity, access and equity, need-based and merit-based aid, government funding and private endowments? In these 9 chapters, case studies discuss the different approaches being taken and the varying results produced.This handbook on the finance of higher education is essential reading for�  college administrators, policy-makers, and graduate programs in higher education administration.

Introduction

If there was ever a time when higher education needed sustained scholarly reflection on finance, it is now. The reality of globalization for higher education suggests an increase in competition'competition for students, faculty, and resources. Member states of the European Union are currently making a speedy and concerted effort to harmonize their curricula and educational processes. This exercise fosters greater mobility among students and faculty. Where mobility is enhanced, competition among service providers intensifies. Technology has brought tremendous progress to distance education. Spiru Haret University in Romania boasts of its educational broadcast that covers most of Europe. University of Phoenix in the United States currently boasts of over 200,000 students spread across the world. Certainly, it is no longer business as usual in higher education. Yet there are very few books on higher education finance; and even fewer are those that attempt to treat this important subject within an international context. There is a reason for this. A colleague from Great Britain described it this way: One thing we all know is that without money we cannot do what we are doing. However, I doubt if any of us can articulate with absolute certainty how money produces effects on education outcome. The actors are constantly changing, the issues are complex, the constraints are many ' not to talk about the ubiquitous politics that one needs to contend with. Almost every time we try to write, events overtake our reasoning before the ink dries on the prints. With a statement like this from an invited contributor, the temptation to lay down the tools and quit was high. Still, the changes and challenges are exciting. Government's ability to control and confine education to its borders is fast eroding. With Internet and satellite systems, it will become harder to police foreign educational outreach. Yet, higher education has never been so important in the hand of government as an instrument by which to effect socio-political and economic policies. Governments must worry about brain drain, about research outcomes getting into the hands of 'rogue nations' and terrorists (not to mention commercial competitors), about the cost of higher education, and about access for its citizenry. Finance has a significant role to play in every higher education decision, yet we know and talk little about it. Admittedly, we all complain about insufficient budgets, but serious academic analysis that is expressed to decision makers in an understandable language is rare. The primary goal of this book is to discuss how higher education is financed in participating countries. Contributors were encouraged to eliminate the jargons of economics of education and to present information that is comprehensible to higher education decision makers. Experience has shown that most higher education decision makers have little or no background in economics or finance and, frankly speaking, may not be interested in economics. Many people have thin patience for complex equations, and those equations are hardly called to mind when one is confronted with real life challenges. While some contributors may have succeeded better than others in simplifying complex concepts, it is my hope that the majority of this book's readers will find it useful, informative, and readable'¦.

Table content

Chapter 1. Financing Higher Education In A Global Market: A Contextual Background 3Introduction 3Importance Of Higher Education 4General Trends 11Greater Participation 12Greater Institutional Diversification 12Greater Student Diversity 13Greater Diversification of Sources of Funding 15Greater Accountability and Control 17Greater Privatization 18Greater User-Pay 19A Growing Popularity of Performance Funding 21Greater Cost Consciousness 21Commercial Ranking of Institutions 22Concluding Principles Of Higher Education 24The Principle of Diversified Higher Education System 25The Principle of Autonomy 26The Principle of Responsive Higher Education System 27Funding For Excellence 29Organization Of This Book 30References 32Chapter 2. Financing Higher Education In The U.S.A: Strategies For The 21st Century 33Introduction 33Higher Education Structure 34Historical Trends 37Higher Education Revenue Trends 40Government Appropriations 45Tuition and Fees 47Endowment Market 47Higher Education Cost Structure 50Higher Education Funding For Equity 54Access Conditions 59Addressing the Issue of Equity 59Challenges Of The 21st Century 63Summary And Conclusion 68References 69Chapter 3. Financing Higher Education In Canada 71Introduction 71Historical Development 74The Current Condition 79Access 82Tuition Fees, Accessibility, And Quality 84Sources Of Revenue 88Tuition Fees 90Operating Grants 94Other Income 96Cost Structure 99Institutional Autonomy 105Changing Trends 107Faculty Roles and Rewards 111Infrastructure 112Financing For The 21st Century 115References 118Chapter 4. Great Expectations And Declining Resources:Financing Higher Education In Mexico 121Introduction 121Higher Education In Mexico 123Too Little, Too Much? 125The Logic of Funding in the 1970s through the 1990s 127The 1990s: Diversification of Funding 132Financial Policies And Their Impact 140Conclusions And Recommendations 144References 147Chapter 5. Higher Education Policy And Finance In Spain 149Introduction 149Recent Historical Development Of Spanish Higher Education 150General Structure And Current Situation Of The System 153Access To Higher Education And Equity-RelatedFinance Policies 156General Traits Of The Higher Education Finance Policy 159Sources Of Revenue And Cost Structure 160Sources of Revenue 160Cost Structure 162Institutional Autonomy and Evaluation 163Academic Staff: Roles and Reward 164Financing For The 21st Century:The Challenges Of Globalization 165Conclusions And Recommendations 167References 171Chapter 6. Financing Higher Education In Austria And Future Challenges 173Introduction 173General Context 175Political and Demographic Context 175The Fabric of Higher Education 175Access 180Free Access 180Massification 181Social-Economic Status Of Students 183Student Assistance 184Institutional Autonomy 188Sources Of Revenues 191Universities 191Fachhochschulen 193Private Universities 194Tuition Fees 194Cost Structure 196Faculty Roles and Reward 198Higher Education Infrastructure 200Higher Education Buildings 201Libraries 203Other Infrastructure 203Conclusions 204References 209Chapter 7. Financing Higher Education In South Africa And Future Challenges 211Introduction 211Historical Development 212Current Condition 220Earmarked funds for institutional redress 225Earmarked funds for student financial aid 225Earmarked funds for other specific purposes 226Access In General 227Sources Of Revenue 229Cost Structure 232The Constant N 235C-Values 235Increase in subsidy students from the previous maximum 236K-Factors 236Institutional Autonomy 240Faculty Roles And Reward 242Higher Education Infrastructure 245Conclusion And Recommendations 249References 252Appendix A. Abbreviations Used 255Appendix B. A Simplified Breakdown Of The Subsidy Formula 256Chapter 8. Financing Higher Education In India Under Structural Adjustment 257Global Economic Crisis And Adjustment 257India's Economy Under Adjustment 261Effects Of Adjustment On Education 265How Does Higher Education In India Respond To Adjustment Measures? 267Decline In Budget Allocations 268Shifts In Higher Education Policy 281Student Fees 283Student Loans 285Privatization 286Neglect Of Higher Education 288Concluding Observations 288References 399Chapter 9. Financing Higher Education In Thailand And Future Challenges 301Introduction 301Background 303Higher Education Finance In The Context OfEconomic Sustainability 304Importance Of Higher Education To SustainableEconomic And Social Growth 307National Education Budget 309Government Expenditure 310New Financial Mechanisms 311Educational Loans 311Private Sector Support 312Autonomy 314Stimulation Of Research And Development 315Issues Of Equity 316Promising Projects And Programs 317Conclusion 318References 322