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The Big Curve: Trends in University Fees and Financing in the EU and US

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  • Douglass, John Aubrey
  • Keeling, Ruth

Abstract

Globally, fees and tuition are growing as an important source of income for most universities, with potentially significant influence on the market for students and the behavior of institutions. Thus far, however, there is no single source on the fee rates of comparative research universities, nor information on how these funds are being used by institutions. Furthermore, research on tuition pricing has also focused largely on bachelor’s degree programs, and not on the rapid changes in tuition and fees for professional degrees. This paper offers a brief scan of pricing trends among a sample group of 24 public and private research universities in the US, all with a wide array of graduate and professional programs, and a small sample group of EU universities. We trace a pattern of convergence not only between US public and private institutions, but also find indications that these trends occur among EU universities. We theorize that pricing among major research universities is increasingly influenced by levels of market tolerance, and a convergence in pricing driven in part by the perception that price confers quality and a corresponding level of prestige to consumers. This study focuses on pricing, and hence does not delve into the complex moderating effects of bursaries and student costs such as room and board. The recent implosion in credit markets may seriously shake this emerging pricing model, in large part because it is increasingly dependent on students taking out sizable loans. But it is our sense that the long-term trends in pricing, including some level of convergence, will continue as institutions that are globally competitive look over their shoulder at what their perceived peer (or near peer) institutions are charging for specific degrees and programs. This in turn will influence the entire higher education market.

Suggested Citation

  • Douglass, John Aubrey & Keeling, Ruth, 2008. "The Big Curve: Trends in University Fees and Financing in the EU and US," University of California at Berkeley, Center for Studies in Higher Education qt6sr3n6km, Center for Studies in Higher Education, UC Berkeley.
  • Handle: RePEc:cdl:cshedu:qt6sr3n6km
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    1. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-751, May.
    2. Nicholas Barr, 2004. "Higher Education Funding," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(2), pages 264-283, Summer.
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    6. David Ward & John Aubrey Douglass, 2006. "Higher Education and the Spectre of Variable Fees: Public Policy and Institutional Responses in the United States and the United Kingdom," Higher Education Management and Policy, OECD Publishing, vol. 18(1), pages 1-28.
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    Cited by:

    1. Peter V. Schaeffer & Scott Loveridge, 2009. "Regional Science and State Rural Policy Research," International Regional Science Review, , vol. 32(4), pages 509-522, October.
    2. Cécile Hoareau, 2010. "FINANCING EU STUDENT MOBILITY: A Proposed Credit Union Scheme for Europe," University of California at Berkeley, Center for Studies in Higher Education qt64r0t16d, Center for Studies in Higher Education, UC Berkeley.

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