Financing Schemes for Higher Education in the OECD Countries

Since the 1980s there has been concern about the rising costs for higher education and most governments required more private spending at university levels. The channelling of private resources into higher education through financial contributions by students is being actively discussed in several countries and loans schemes are already in operation in some countries. There has also been a lot of debate about the justification for public subsidies. Public support for higher education takes two main forms: direct subsidies to institutions (which keep fees low), and/or student maintenance in the form of grants. Many governments are reluctant to conclude that students should have to start repaying most of the cost of their degrees. Even in the United States, which has many private universities, there is a great deal of public support. One possible way of reducing costs is the distinction between research universities (which emphasize the research function, for few students) and teaching universities (which emphasize the teaching function, for most students). The unit costs of teaching institutions are expected to be lower than those of traditional universities.