"Cost sharing" may also take the form of public institutions charging more nearly "break even," or "full cost" fees for room, board, books, and other costs of student living that may have been formerly covered mainly by government. In some cases, the shift of the cost burden from government to student and family may come in the form of a reduction in student grants, or in the “effective grants” represented by student loan subsidies in the form of very low rates of interest. Finally, the shift may come about through public policies shifting enrollments from a heavily subsidized public sector to a much less subsidized, tuition-dependent private sector. But in all these ways and in combinations thereof, the burden of higher educational costs worldwide is being shifted to students and families from governments or taxpayers (or from the general citizen/consumer losing purchasing power through hidden business taxes or through inflation brought about by public deficit financing).

 In light of this apparent phenomenon, this paper explores five questions:

1. What is the theoretical rationale for shifting some portion of the higher educational cost burden from governments and taxpayers to students and families?

2. What are the elements of theoretical political, ideological, or practical/strategic resistance to this shift?

3. What is the theoretical impact of increasing cost burdens (mainly tuition and related fees) on access or participation? Or, what is the impact of increasing student and family-borne costs on student enrollment behavior: to enroll, to persist to a degree, to persist to a higher degree, and where, or in what kind of, higher educational institution, to enroll? In this connection, we can anticipate a greater enrollment impact on those whose access is already compromised by, e.g.:
 

• low income;

• isolation--from good secondary schools and the cultural enrichment generally associated with urban areas, as well as from proximate institutions of higher education;

• gender (or more directly, "being female");

• racial, ethnic, religious, or linguistic status.

4. What is the higher education cost (or more properly, the expenditure) burden (or pattern of burdens) currently being borne by the student and family in various countries, and what is the recent increase in these costs being borne by students and families as opposed to governments or taxpayers? (Answering this question must consider any offsetting effects of means-tested or otherwise targeted grants and student loans.)

5. What policy tools—e.g., need-based grants, loans, loan subsidies, very low or no tuition, subsidized student living arrangements (room and board)—are being employed to increase and/or to more nearly equalize accessibility—and what is known of their efficacy?
 

The principal causes for, or rationales behind, this shift are three, and they differ considerably in their underlying economic, political, and ideological assumptions. The first rationale is the sheer need for other-than-governmental revenue. This need begins with the dramatic increase in most countries in both the public and private demand for higher education, recognized as a major engine of national economic growth and provider of individual opportunity and prosperity. This is especially true of those countries still trying to change from "elite" to "mass" tertiary-level participation, at the same time as they are trying to become more economically competitive in an increasingly global economy, as shown in Table 1. But the increase in demand is also found in countries with mass or even near-universal higher education, as the average student "consumes" ever increasing amounts of higher or (at least postsecondary) education over his or her lifetime.
 

                                                                              World                 63%
                                                                              Africa               180%
                                                                              America              35%
                                                                              Asia                  138%
                                                                              Europe                30%
                                                                              Arab States        140%
                                                                              Latin America      80%
                                                                               & the Caribbean

However, the institutions delivering higher education are also nearly everywhere--and especially in most developing or low-income countries and in those countries in transition from command to market-driven economies--suffering from a severe and worsening austerity. This austerity is a function of at least three forces: (1) the increasing enrollment pressures noted above; (2) high per-student costs  and a traditional resistance on the part of the academy (institutions and faculty alike) to measures that might increase efficiency or productivity ; and (3) declining public (taxpayer-based) funding. This decline in public revenue, in turn, is a function both of increased difficulty of taxation  and of competition from other, oftentimes more politically compelling, public needs.  It is in light of these forces and of the consequent financial struggles that national systems and institutions nearly everywhere in the world are having to supplement their governmental revenues not only with "cost sharing," as noted above, but with entrepreneurial activities such as the sale of faculty services, the sale or lease of university facilities, the vigorous pursuit of grants and contracts, and fund raising from alumni, corporations, and friends.

Thus, tuition and other fees from students and families have the potential for substantially augmenting the increasingly scarce public revenues. Tuition also has the advantage of doing so without simultaneously adding new cost or diverting faculty from their core teaching responsibilities (as is the case with supplementing revenues via grants and contracts or other forms of faculty entrepreneurship.)

The objection that imposing tuition or increasing it at a rapid rate might exclude potential students from poor or rural or otherwise disadvantaged families can be met, it is argued, by the promise of generally available loans (i.e., loans that do not depend on the creditworthiness--and thus the financial worth--of the family), or by means-tested student grants, paid for, at least in part, by the augmented tuition revenue. Reinforcing the soundness of turning to tuition as a revenue supplement even in the face of almost inevitable opposition from students is the observation that if the alternative to some student/family cost sharing is continued or worsening austerity, the likely result of which would be limitations on enrollment and/or increasingly shabby and underfunded universities, the students who would suffer the most are almost certain to be the very disadvantaged students that a resistance to tuition is supposed to protect.

The second rationale for tuition and other forms of cost sharing, based less on need or expediency than on principle (however ideologically contested), is the notion of equity: the view that those who benefit should at least share in the costs. The principle is made more vivid and compelling by four observations. The first is that "free” higher education is actually paid for by all citizens, whether or not they know that they have been taxed (or have had their purchasing power effectively confiscated by inflation brought on by the printing of money). Second, most taxes (public policies to the contrary notwithstanding) are collected through regressive, or at best proportional, taxes on sales, production, or individual incomes that cannot be otherwise hidden (or through the even more regressive governmentally-induced inflation, as mentioned above). Third, a very disproportionate number of the beneficiaries of higher education are from middle, upper middle, and upper income families who could and would pay at least a portion of the costs of instruction if they had to--thus demonstrating the value to them of the higher educational opportunity and signaling the benefits that are thought to be private as opposed to public. Such students and families would probably prefer that much or all of this particular benefit be paid for by the general taxpayer. But whether the higher education is subsidized or not--that is, whether tuition is zero, moderate, or high—should make little or no difference in the enrollment behavior of the student from more affluent families. In this instance, the higher public subsidy required by low or no tuition would more nearly resemble a transfer payment from the public treasury to middle and upper middle class families. Fourth and finally, to the extent that there are potential students who would be excluded from higher education by the presence of tuition, a portion of the tuition collected can easily (at least in theory) fund the means-tested grants and loan subsidies that can (again, at least in theory) maintain and even enhance accessibility.

The Market. A third rational for cost-sharing in higher education is the neo-liberal economic notion that tuition—a price, as it were, on a valuable and highly demand commodity—brings to higher education some of the virtues of the market. The first is greater efficiency: the assumption that the payment of some tuition will make students and families more discerning consumers and the universities more cost-conscious providers. The second virtue attributed to the market is producer responsiveness: the assumption that the need to supplement public revenue with tuition, gifts, and grants will make universities more responsive to individual and societal needs. A variation on this theme is directed at the alleged problem of academic malingering—that is, students alleged to be taking more years or more courses (or both) than are necessary or even useful merely or largely because the courses and sometimes even the living expenses are paid for, and because the alternative may be either unemployment or an unappealing job in the real world. Germany, the Netherlands, and the US have responded in part by eliminating or reducing student aid after insufficient progress toward the degree, and some US states have begun charging the higher out-of-state tuition after so many “excess” credits.
 

All of this is admittedly contested ideological ground, and not all policy makers, observers, or stakeholders share the notion that increased cost sharing—that is, a further shift of the cost burden to the student and family--is correct, necessary, or even “good expediency.” The shift in the higher educational cost burden from governments and taxpayers to students and families may not be easily accepted especially in countries with dominant socio-political ideologies that hold higher education to be another social entitlement: to be free, at least for those fortunate enough to make it through the rigorous academic secondary system. This ideology, in turn, can stem from a view that society is the major beneficiary of higher education, and that this observation ought to override the demonstrably high private benefits received by the graduates and their families.

This economic rationale provides good theoretical cover to student, parent, and faculty self-interest in the preservation of low or no tuition. Students, regardless of ideology, tend (understandably enough) to resist the imposition of, or increase in, tuition. Students can be a formidable political force, particularly in left and radical politics, especially in Europe and Latin America and in some countries in Asia. Also, parents of students and would-be students, especially in low-income countries, may be politically powerful elites who just happen to benefit most from the free higher education. This may explain why many students and families, both affluent and low-income, and both "left" and "right" often tend to oppose tuition, while most economists and many political scientists, including those on both the political left and right, tend to approve at least some degree of “cost-sharing.”

In opposition to the efficiency and the market responsiveness rationales for greater cost sharing, many academic leaders assert that a proper higher education is supposed to be removed, or at least substantially insulated, from commercialization and market forces. Slavishly following what students think they want, or what politicians or business think they want students to take, according to many academic traditionalists, is the road to academic mediocrity. Furthermore, there is no evidence, at least in the US, that academic responsiveness, educational quality, or efficiency improves with higher tuition. However, this traditionalist position is increasingly viewed by governments and many citizens as academically self-serving as well as costly to the taxpayer.

The view that higher education ought to be "free" or at least very highly subsidized may also be neither ideological or theoretical but essentially pragmatic: the view that means-tested financial assistance and loans might in theory preserve accessibility in the face of rising tuition and diminishing taxpayer subsidies to the "well-off," but that children of the poor may not understand that the high tuition can be offset with grants and hence might not aspire to a university education during the middle and secondary years when the absence of such aspiration may effectively preclude the option of any higher education. It is also alleged that children of working class or peasant backgrounds resist borrowing, less from personal economic calculations than from a cultural aversion to debt. Finally, while a policy of high tuition combined with generous means tested aid might be more efficient, in the sense that the available public subsidies can be more effectively targeted, the high tuition can be imposed by short term political expediency, while the high aid requires a longer term ideological commitment--and the result can easily be a de facto policy of “high tuition-low aid” or “high tuition-high loans only.

Finally, a resistance to the shift of costs from governments and taxpayers to students and parents may also be mainly strategic: a recognition that scarce taxpayer dollars are allocated by political authority not on a rational assessment of the costs and benefits of all competing claims, but on the basis of which claims can muster the greatest political pressure. An increase in, tuition, for example, may lead neither to more resources for the university nor to a shift in public resources to more socially worthwhile programs, but simply to a shift of taxpayer resources from higher education to another claim that is more politically forceful. Thus, it is not necessarily irrational or irresponsible for stakeholders to advocate for one particular object of public expenditure—say, high subsidies and low or no tuition for higher education—to the exclusion of other public purposes (or tax cuts), which can be assumed to have their own fierce advocates.

However, if the political authorities do not or cannot provide sufficient public revenue to higher education in spite of much advocacy and resistance to tuition, the continuing austerity at some point may become sufficiently damaging-- to the point of severe enrollment limitations and increasingly inadequate numbers and/or quality of faculty, books, equipment, and physical plant—that more and more parents, students, university rectors, and faculty accept the inevitability, and even perhaps the desirability, of cost-sharing through tuition.
 

For the reasons cited above, some increased costs born by parents and students are probably both inevitable and economically rational. The tenants of neoliberal economics seem to be ascendant in most countries at the close of the Twentieth Century, including China and much of Eastern and Central Europe, as well as the highly industrialized countries of the so-called G-7. In the US, UK, and Germany, the embrace of market solutions, privatization, and fiscal discipline—long the hallmarks of conservative parties, have become central to the political planks of what traditionally had been the parties of the left, particularly when these parties took over their governments in the 1990s. Although public higher education in the US is the province of the several states, the 1980s and 90s saw very great increases in public sector tuition in most states. Britain in 1997 ** under a Labor government, became the first European country to adopt public higher education tuition as official government policy. And Germany, also once again under a Social Democratic Government, in 1999 conspicuously failed to reiterate the traditional Higher Education Framework Law guarantee of free higher education to all successful graduates of the German academic secondary school.

The supplementation of higher educational revenues by non-governmental sources--primarily students and 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 in the developing world.  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. We see the dilemma of 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. Representative public sector uitions in a number of countries are shown in Table 2.
 

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Source: Information gathered by the Higher Education Finance and Accessibility Project, University at Buffalo Center for Comparative and Global Studies in Education

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 other traditionally 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 assistance and/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 a sufficiently affluent middle class that can afford tuition) such beliefs and traditions as:
 

• a belief in the very appropriateness of tuition—i.e., that parents and/or students should contribute to the instructional costs of higher education, at least to the limit of their abilities, even in the acknowledged "public" institutions;

• 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 nearly $56 Billion dollars in student aid and loans, most of it "need-sensitive") that the US, in the face of very high costs of higher education, both public and private, 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. Elsewhere, in the absence of these traditions, and of public policies to maintain accessibility, there is reason to believe that higher education will become increasingly unattainable to all but the affluent.

But policies such as means-tested financial aid and generally available student loans at moderate interest rates are financially, politically, technically, and sometimes culturally difficult. For example, “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.
 

 In response to recognition of the need for, and even the inevitably of, greater “cost-sharing”—which frequently is merely a euphemism for the introduction of, or sharp increase in, tuition--ministries and higher educational leaders frequently inquire: “What is the proper level of tuition?” They are generally looking either for a monetary amount, or a percentage of instructional costs, that would be “appropriate,” or at least in some kind of international higher educational mainstream.

But the question of “a proper tuition” cannot be given any kind of useful answer apart from a context of other policies and contextual circumstances. The principal ones are the following.

1. The existence of other kinds of non-discretionary “fees” in addition to tuition. These “other-than-tuition” fees may be so-called “up front” or “one time” fees, or other mandatory fees for e.g., application, registration, student programs, athletics and recreation, technology, etc. The state of California was notorious for maintaining very low tuition only because of the very high fees. Japanese universities charge “application fees” as high as $350, which for the major private universities can provide in excess of $15 million in operating revenue with almost no offsetting cost. Indian universities also *****

2. The per-student costs of the particular higher educational institution or program in question. Costs vary substantially across institutions and sectors, and especially across programs. If “cost sharing”—generally meaning the charging of tuition—is established by policy as some appropriate percentage of per student instructional expenditures, then it matters greatly in making international comparisons how these per-student costs, or expenditures, are calculated. But these costs depend on assumptions or accounting conventions: for example, how costs, or institutional expenditures, are apportioned among first-degree or graduate instruction, or how pension costs, the costs of health insurance, or the costs of capital are handled.  In addition, per-student costs vary considerably among degree programs in accord with prevailing faculty-student ratios, equipment needs, and other program-specific costs—as, for example, among programs in science, history, or undergraduate teacher education.

3. The private benefits believed to be attached to certain institutions or certain degree programs. Regardless of the underlying instructional cost differences, it is commonly thought appropriate (or perhaps merely expedient, or just more feasible) to recover a higher percentage of these costs from those programs and degrees believed to bring the greatest private return to the student (or parents)—either in income alone, or in prestige, job security, or anything else valued in a profession or vocation. Thus in the world of private higher education, and in public higher education where tuition is permitted, tuition and associated fees for medical (and dental and veterinary medicine) programs are generally high, reflecting not only the greater instructional costs of such education, but the high market value of the degree (itself a reflection of the high income and high status associated with these professions.) Also, as much of the world that was formerly dominated by Socialist/Marxist central economic planing has given way to private enterprise and market forces, the demand for higher education in economics, management, law, computer and information science, and the English language has risen greatly—and so, too, tuition in such programs.

The establishment of a “proper tuition” is made even more complicated by the interaction and the inter-country variations between these two factors of (1) instructional costs and (2) the mix of public and private benefits. For example, it is conventionally thought that research, or classical, universities are more costly per-student than shorter-cycle, more vocationally-oriented, less research-intensive institution, so that a common percent of costs to be charged to students and their parents will generally yield a higher tuition in the classical, research university. However, although the presumably higher unit costs of the classical university may be true for medicine it is probably not true for other programs such as law or business that are frequently higher tuition, but that can be rather inexpensively delivered, at least at the first degree level.

A higher tuition in the classical university is also reinforced by the notion that there is greater prestige—and thus greater private benefits and future income prospects--attached to a degree from the classical university. In addition, the university student is more apt to be from a wealthier family, and thus likely to be both willing and able to pay a higher tuition. And if the student is not from a wealthy family, the greater private benefits and income prospects of the student should still be sufficient—in the economically rational world—to support student loans, and thus the payment of the higher tuition.

However, except for the medical and related degrees, which continue to be associated with classical universities, most of programs that are coming under greatest demand in much of the world—economics, management, computer and information science, law, and the study of the English language—can be taught and learned as (or more) easily in a non-university context. In fact, it can be argued that it is more likely to be the university student—more than the student at a short cycle non-university institution--who is more likely to be bringing substantial public as opposed to mainly private benefits. Under this construction, it would be the classical university that needed (or deserved) the greater public subsidy (and the lower tuition) more than the non-university institution that is more apt to be creating predominantly private benefits.

So in many of these traditionally high tuition programs, the tuition differential may be said to be as or more a function of the market demand for places—which correlates nicely with the expected private monetary return, and also the probability of higher incomes and consequent greater likelihood of repaying student loan debts.

3. The costs of student living: especially room and board. These expenses are in large part a function of the degree to which it is possible to live at home—which, in turn, is a matter of proximity of the college or university to the home, the availability of inexpensive transportation, and to some degree the  “culture” of acceptability or non-acceptability of living with one’s parents into one’s 20’s. State policies in America, for example, generally aim at putting at least a community college within the commuting range of every family (which in the US often assumes automobile ownership.) Clearly, this is not possible in rural parts of most countries, where traditional college-going must assume living “in residence.” But even where living with parents is possible, the general cultural acceptability may vary among countries, with such an arrangement allegedly being more acceptable in France than in England or Germany.

If the student cannot live at home, the cost of student living is most affected by the degree to which residence halls and/or canteens are publicly subsidized or otherwise made accessible at minimum cost. (The tradition of institutionally-provided residence halls is a legacy of the British collegiate model of higher education, reinforced in those countries where university attendance was assumed to be properly free of any student or family-financial responsibility. But these residence halls can be Spartan and crowded, as in China, where a very low charges might even cover the very minimal real costs--or quite opulent, as in many US college and university dorms, with air conditioning, private bedrooms, and extensive “common spaces,” in addition to the absence of any governmental subsidy, all of which can make living in a university dormitory in an urban area frequently more expensive than in surrounding low-cost, unsubsidized private housing.) Table 3 shows the total combined expenses borne by students and parents for selected countries.

4. Parental willingness to pay. The willingness and expectation to make financial sacrifices to support their children’s higher education may be a function of culture as well as of affluence. This is not intended to impute a special nobility to those cultures where parents typically make large sacrifices on behalf of their children’s higher education. But the Swedish parent, for example, has become accustomed to paying very heavy taxes, but
then to enjoying the benefit of “free” university education for their children as well as the Scandinavian convention of students paying for their living costs through subsidized student loans; the imposition of tuition charges in Sweden could well be resisted, even by parents who by most measures could well afford the tuition. In contrast, the Chinese parent, who probably has only one child to begin with, and who has probably always placed a very high value on education (or else the child would not likely be in a position to contemplate higher education), is apparently willing to make considerable personal financial sacrifices for their child to go to a university.
 

                                                                          Public                                                                         Private

	Tuition &Fees	Food & Board	Other Costs	Total Costs	Tuition & Fees	Food & Board	Other Costs	Total Costs
United States	$4000	$5650	$2350	$1200	$20,000	$6600	$2400	$29,000
Canada	$2668	$3750	$5547	$11965	n.a.	n.a.	n.a.	n.a.
China	$442	$973	$530	$1945	$885	$973	$884	$2742
Mexico	$16	$1775	$380	$2171	$4218	$2715	$880	$7813
Kenya	$316	$790	$540	$1646	$2236	$1184	$618	$4920
Namibia	$884	$1301	$334	$2519	n.a.	n.a.	n.a.	n.a.
Malaysia	$3515	$2000	$1500	$7015	$4325	$3100	$1500	$8925
Germany	$190	$2760	$1840	$4790	n.a.	n.a.	n.a.	n.a.
Britain	$1000	$5500	$1500	$8000	n.a.	n.a.	n.a.	n.a.

    Source: Information gathered by the Higher Education finance and Accessibility Project, University at Buffalo Center for Comparative and Global Studies in Education

Parents may be thought to be more willing to pay in countries with substantial private education, where people are more used to paying for the higher (and sometimes the secondary) education of their children. This seems to be the case in the US, where tuition at private colleges and universities may be in excess of $20,000 a year, and total expenses well in excess of $30,000, and where undergraduate residential tuition in the more expensive public universities can now be $4-5000 or more (having  been rising more steeply than those in the private sector) , and where total expenses easily reach $15,000 a year. However, the expected correlation of public and private sector tuition does not hold in international comparative analysis. Japan, Brazil, India, Korea, the Philippines, and other countries with established private higher education sectors still feature low or no cost public classical universities. Furthermore, efforts to increase tuition in the public sector--even modestly and even in light of (or perhaps because of) the pronounced middle and upper income profiles of these advantaged student bodies--seems still to be met with intense political opposition.

In America, parents have always faced a quite precisely calculated “Expected Family Contribution." But this EFC itself is a function not of some ex ante rule of what parents at various income levels ought to pay, but of what they seem in fact willing to pay at a particular time in a particular culture. This EFC in the US has actually diminished in recent years. Some would say that this diminution reflects a growing middle class hedonism; others would say that the US Congress, has pandered to middle and upper middle class tuition anxiety by legislating out most of the EFC that used to stem from parental assets, principally home equity. The US case is further complicated by the large number of students from single parent homes where “parental financial responsibility” is difficult to determine or enforce. Also, there are very many students in America who are both financially needy and academically marginal and otherwise ambivalent about higher education, but who have places in the open admission sectors of American higher education. Such students may say that they would decline to enroll or drop out  in the event of large tuition increase. Or, they  may attribute their dropping out to "financial factors," but this may also be the most socially acceptable reason to profess--quite a bit more so than factors like academic difficulty, boredom, or loss of interest in further education, or their parents unwillingness to pay what other similarly-situated parents might pay willingly. In short, parental willingness to pay, like student willingness to incur indebtedness, is probably substantially culturally determined, and may further differ by social class or family income--but with the true effect of the strictly financial factors associated with cost sharing embedded within other factors, and difficult to identify precisely.

5. Possibilities for student summertime and term-time employment. Working one’s way through college is part of the American myth--and is still substantially true.  The US student who claims “financial need” is expected to earn and save at least $1500 during summers. He or she is also expected to hold down a part-time job, generally about 10 hours a week, for approximately $2000, but very many American students hold jobs requiring from 20 to 40 hours a week—all the while enrolling supposedly “full time” (although in fact frequently taking more than the standard four years to complete a degree). But the ability of student summer and term time employment to contribute substantially toward cost sharing is a function of at least four factors that may be especially prevalent in the US: (1) a culture of acceptance--even expectation--of part-time youth employment, even among affluent families where such employment is not essential to the family’s financial well being; (2) a generally robust economy with an abundance of part-time, unskilled, low paying but readily available jobs, (3) the encouragement and financial assistance of the Federal Work-Study Program, which partially subsidizes college and some community jobs for needy students; and (4) collegiate standards (low compared to most countries) and an academic calendar (including extensive evening classes) that allows and even encourages part-time study and “stopping out.” Taken together, these economic, cultural, and structural features combine to allow substantial cost sharing by the student from part-time and summer employment.

Clearly, these features may be largely absent in many countries, and seem to be especially absent in those countries that are experiencing the greatest need to supplement governmental revenue. But the non-availability of student employment puts more pressure on grants and loans—to which we next turn:

6. The general availability and sufficiency of "need-based” or “means-tested” grants and subsidized loans. In theory, a “need-based” grant, increasingly in conjunction with a student loan, substitutes for the missing parental contribution from the low-income family. By “general availability,” is meant the degree to which a student otherwise interested in and admissible to higher or post secondary education is entitled to, or at least can generally expect, a grant or subsidized loan either because of his or her family’s low income, or in any event not to be precluded from borrowing by the absence or family collateral or a creditworthy parent. Grants and loans not generally available are by definition rationed, usually by criteria of academic merit or preparedness having nothing to do with the ability of the family to provide financial support. The US Pell grants, the former British mandatory grants, the French bourse sociale, and the German BAföG, are examples of governmentally-provided student financial assistance to which a student is entitled simply by being accepted by a university and being from a low income family.  Because academic merit or preparedness, at least as conventionally measured, is strongly correlated with socio-economic status, the more “merit” figures into the awarding of grants and subsidized loans—much of which (to the upper-middle class) is likely to have little or no impact on the student’s enrollment decision—the less is apt to be available for low-income students, and the more the imposition of tuition is thus likely to be a barrier to higher educational participation.

"Sufficiency" refers to the ability of the need-based grant or loan subsidies to truly compensate for the low income of the family. "Sufficiency" is a function of the maximum grant or loan subsidy (i.e., that amount to which the children of the lowest income families wold be entitled) and the degree to which that amount can truly compensate for the unavailability of parental contributions. In its most generous formulation, a grant-loan combination is “sufficient” to the degree to which it can bring within financial reach of the lowest income family the best higher education to which the student would be otherwise entitled. In its minimum formulation, a grant-loan combination might be deemed “sufficient” if it brought at least the least expensive higher educational alternative (probably a short cycle, non-university form) within reach of those students able to live at home and perhaps also work part time (or even full time) and attend college only part time.

“Sufficiency” is also a function of the relationship of the grant (or the grant/loan combination) to varying family incomes: that is, the (low income) point at which the maximum grant begins to be diminished (under the expectation that the family can now begin contributing at least something) and the rate at which further increments to family income are effectively “taxed” through higher expected family contributions and further reductions in the need-based grant.

Obviously, the more generally available the grant (that is, the more it is based on income alone, without further rationing by some measure of “merit”), the more sufficient the grant (that is, the more generous the grant, or the grant/loan combination, in making possible the most costly alternative to which the student would be academically entitled), and the more realistic the expected parental contribution (in the sense of phasing out the grant and phasing in the expected contribution at a level and rate that most families are able to meet), the more the need-based grant-loan system compensates for higher tuition, and less the high tuition is likely to inhibit higher educational participation.

To inquire about what tuition should be--or what the total expense burden borne by the student and family should be-- requires an answer (or more likely, a range of answers) within the context of all of these factors. One can expect to find a very considerable expense burden--in the range of US$ 20,000-30,000--in the presence of such factors as: (a) very high tuition--as in private higher education with no or minimal public support of basic instructional costs (as in US); (b) a high demand field (e.g., medicine or economics) with high private benefits; and (c) living away from home. The lowest financial burdens upon students and parents may be found in some combination of: (a) low or zero tuition  and (b) the opportunity to live at home. Many countries, as shown in Table 4, have a considerable range of total costs/expenses borne by the student and parent before financial assistance in the form of either grants or loans.

                                                           Public                                                      Private

	High Estimate	Low Estimate	High Estimate	Low Estimate
United States	$12,000	$6000	$29,000	$18,000
Canada	$8028	$3960	n.a.	n.a.
China	$1947	$390*	$2743	$1106
Mexico		$4350	$6828	$4793
Kenya	$1711	$395	$4342	$2632
Namibia	$2540	$436**	n.a.	n.a.
Britain	$10,000	$6,000	n.a.	n.a.

*A teachers or military college or college of Agriculture
**A short-cycle technical institute

Source: Information gathered by the Higher Education Finance and Accessibility Project, University at Buffalo Center for Comparative and Global Studies in Education
 

To the degree to which financial assistance is to compensate for low family income and to bring higher education within reach of any student of requisite ability, regardless of his or her family’s income, either grants (non-repayable) or loans (repayable by the student, parent, business enterprise, or taxpayer) should suffice--providing that students are willing to borrow, and that banks or other savings institutions are willing to lend to them. Students would presumably always prefer that their assistance be non-repayable--that is, in the form of grants, in addition to no or very low tuition, subsidized room and board, and very subsidized loans that are really “near grants.” However, to the degree to which the rationale for the combination of tuition, unsubsidized students living arrangements, and accompanying student financial assistance is avowedly to shift costs from governments and taxpayers to students and parents, then the more this student assistance can be in the form of a true loan, the more effectively all of the rationales discussed earlier can be met. That is, it is loans (or other versions of deferred payments, like graduate taxes) more than governmentally-provided grants that:

1. relieve the government, and thus the public sector generally, of some of the burden of the high and rising costs of higher education and (at least theoretically) provide more revenue to the university;

2. promote equity by allowing the costs of higher education to be shared between the public, reflecting the not inconsiderable public benefits of higher education, and the family, reflecting the also considerable private benefits to both the student and the family;

3. engage the forces of the market to enhance both the efficiency and the responsiveness of the university.

However, in order to relieve the public treasury and truly shift the cost burden to the student and parent, the loans must be repaid--and at the generally prevailing rate of interest. This is as true with "contingent repayment” or “income contingent” loans, such as are employed in Sweden and available in the US,  as with conventional “mortgage type” loans. It is also true of other forms of deferred payment where the student presumably bears a share of the higher educational cost burden, but only repays in the future, over time, and only as long as he or she is gainfully employed. Such repayment schemes include the so-called graduate tax (often advocated, but never fully implemented) , the “income surtax” repayment employed in Australia through the Higher Education Contribution Scheme (HECS), and the “drawdown” of governmental pension payments employed in Ghana to repay the student loan fund. In all of these repayment schemes, the present discounted value of the stream of future payments (or of income surtax payments, or of foregone pension fund contributions) must equal the original value of the loan, or of any forgiven tuition, for the cost burden truly to have been shifted to the student. To the extent that loan repayments are “lost” through high defaults, lost tax records, emigration or simple disappearance, subsidized interest rates, or excessively high governmentally-borne costs of collection and servicing, the loan does not really shift the costs, and can be more accurately characterized as a “near,” or “effective” grant (and a rather inefficient one at that).
 

Countries differ in the percentage of a traditional tertiary education age cohort that actually goes on to various forms of higher or postsecondary education. Since there are substantially differing private benefits attached to these different forms, it "matters," for example, whether students choose, or are able to elect, or are tracked into or restricted from:

• no tertiary level education at all;
• a short-cycle, minimum status, non-selective form of postsecondary education;
• a selective, prestigious, classical university; or
• the most selective and prestigious university programs, such as medicine or law or advanced study toward the Ph.D.

Factors generally considered "unacceptable"--and therefore, if possible, to have their association with "access" lessened by policy--would be:
 

• low income or low social status of the parents;
• region (especially being rural or remote);
• race, religion, or ethnicity;
• gender (although this may be a more culturally contested "unacceptable correlate").

In this construction, then, higher educational accessibility may be seen as a policy goal, more or less common to most countries, realized to the degree to which the principal correlates with higher educational participation--and to participation within the more prestigious or selective forms or levels of higher education--are mainly interest, ability, and talent, and conversely are not family income or status, race or ethnicity, gender, or region or rural/urban location.

 There exists in virtually all countries a substantial underlying association between low higher educational participation and these above-mentioned unacceptable correlates, particularly family income and status, race and ethnicity, rural or remote location, and at least in many developing countries, gender. The true causation that diminishes the probability of higher educational participation may be subtle and complex, and may have done its work long before the end of secondary schooling, when more fortunate young people and their parents are making decisions to partake of higher education. High income-high status families are apt to place more emphasis early in a child's life on education. They are apt to have more books in the house, to take more of an interest in their children's education, and to be able to afford (or live where there exist) better middle and secondary schools—all in order to better prepare their children for university entrance. In most countries, the correlation between higher educational participation with family income, status, and other "unacceptable correlates" is well established before the completion of secondary school. Therefore, in a more limited sense, this paper will take the issue of a possible link between cost sharing and accessibility to be the degree to which costs can be passed on to students and parents without further accelerating the "unacceptable correlates" of higher educational participation with family income.

Accordingly, an investigation of the connection between cost sharing and accessibility must examine the effect of greater higher educational costs passed on to students and families (probably in the form of higher tuition, or the implementation of tuition where it did not heretofore exist, or the reduction of student living subsidies) on:
 

• the decision to apply to, and matriculate in, an institution of higher education;
• the decision to apply to, or matriculate in, a particular form (e.g., university or non-university) or program (e.g., medicine, law, engineering, or humanities) of higher or postsecondary education;
• the likelihood of degree completion;
• the likelihood of going on to more advanced (and more prestigious and/or remunerative) levels of higher education.

The empirical research on the effect of both tuition and need-based financial assistance on student enrollment behavior is mainly econometric analyses, either cross sectional or time series, of enrollment and persistence of US students in response to differing state tuition policies. This research supports this conventional wisdom that net price--that is, the combined effect of tuition discounted by financial aid--has little effect on middle and upper middle income students. However, it can have a measurable discouraging impact on low-income youth, an impact that is only partly offset by increasing need-based aid.

Significantly, there are factors in the US that may serve to blunt the impact of rising tuition on enrollment behavior, or at least diminish the likelihood that the effect will be an outright denial of accessibility.  Among these factors are:
 

• the very great number of open-access two year college within commuting range of most US homes, successful completion of which is generally transferable, or applicable toward a four-year degree;

• a similar widespread availability of very many virtually open admission four-year colleges;

• the peculiarly American “degree-by-credit-accumulation,” or “modular,” system that makes possible easy “stopping out” (for example, to earn and save money) or transfer from an expensive residential college to a less expensive alternative within commuting range of home;

• an economy with abundant part-time employment possibilities;

• the general availability of affordable student loans (that is, without any test of credit worthiness applied either to students of their parents).

The effect of these factors is to cushion the impact of increasing tuition, and to present alternatives to not matriculating at all, or to dropping out altogether, in response to an increase in the cost to be borne by the student or family. It is in countries where such factors do not exist—i.e., where the two year alternative is not transferable to a four-year or advanced degree, or where there are no easily accessible higher educational alternatives within commuting range of home, or no generally available student loans, or no practical part-time student employment opportunities—that a sharp rise in tuition or other expenses borne by the student or parent can be assumed to be more likely to preclude higher educational participation altogether.

In the end, we know very little still about the impact on higher educational accessibility of the increasing shift of higher educational costs, worldwide, from governments and taxpayers to student and parents. We know that the shift is happening, and we know that most governments officially espouse a concern for the maintenance (or probably the enhancement) of higher educational accessibility. What we do not know, at least not yet by systematic empirical study, is the impact on university enrollment behavior (or higher educational participation generally) of increasing cost sharing. Nor, even more importantly, do we know from empirical study the ameliorative efficacy of the common access policies such as means tested grants, loans, or enhanced student employment opportunities.
 

Building on these themes and on the expertise and interest of its faculty and advanced graduate students, the Center for Comparative and Global Studies in Education at the State University of New York at Buffalo is beginning a Program for the International Comparative Study of Higher Education Finance and Accessibility. The planned activities of this program are to:

1. Create an international data base on the costs of higher education borne by students and parents (e.g., tuition, other kinds of fees, room, board, travel and other expenses).

2. Examine models of tuition and aid policies for specific countries, and compare and contrast official policies, unofficial practices, trends and their consequences both to the financial health of institutions and to higher educational accessibility.

3. Document emerging solutions (e.g., loans, interest subsidies, means-tested grants, tax benefits, graduate taxes) to the possible access dilemma created by the shift of higher educational costs to students and families. Identify the criteria for provision of direct and indirect public subsidies, including e.g., academic promise, economic need, social criteria (class, race, gender, ethnicity), or political considerations.

4. Establish an international network of students, scholars, administrators and policy makers, government and non-government sector representatives, and private sector agencies to review and update the database on a regular basis.

5. Prepare papers on special topics related to the worldwide shift of higher education costs from government to parents and students.

6. Commission papers from in-country scholars on topics such as:
 

• the initial experience with tuition in the Peoples Republic of China,
• privatizing higher education and accessibility in Latin America,
• the Higher Education Contribution Scheme in Australia,
• the politics of tuition and student loans in Britain,
• the expansion of higher educational opportunity and the politics of "redress" in South Africa, and the role of tuition, and student financial assistance.

Bain, Olga (1997) “Cost of Higher Education to Students and Parents in Russia: Tuition Policy Issues.” Buffalo, NY: The Center for Comparative and Global Studies, State University of New York at Buffalo [unpublished paper.]

Blair, Robert D. D. (1992) “Financial Diversification and Income Generation at African Universities.” AFTED Technical Note No. 2. Washington, DC: World Bank.

Clark, Burton R. (1998) "The Entrepreneurial University: Demand and Response," Tertiary Education and Management, Vol. 4 No. 1, p. 14.

Eicher, Jean-Claude, and Thierry Chevaillier (1992) "Rethinking the Financing of Post-Compulsory Education," Higher Education in Europe, Vol. 17, No. 1:6-32.

Inter-American Development Bank, Sustainable Development Department, “Higher Education in Latin America and the Caribbean: A Strategy Paper," nd [1997] p. 6.

Johnstone, D. Bruce, (1986) Sharing the Costs of Higher Education: Student Financial Assistance in the United Kingdom, the Federal Republic of Germany, France, Sweden, and the United States. New York: College Entrance Examination Board.

__________ (1991) "The Costs of Higher Education," in Philip G. Altbach, ed., International Higher Education: An Encyclopedia, Vol. 1.  New York: Garland Publishing, Inc., pp. 59-89.

__________ (1992) "Tuition Fees," in Burton R. Clark and Guy Neave, eds., The Encyclopedia of Higher Education, Vol. 2. London:  Pergamon Press, pp. 1501-1509.

__________ (1993) “The Costs of Higher Education: Worldwide Issues and Trends for the 1990s” in Altbach, P. G. and Johnstone, D. B., The Funding of Higher Education: International Perspectives. New York: Garland Publishing.

__________ (1999) "Financing Higher Education: Who Should Pay and Other Issues" in Philip G. Altbach, Robert O Berdahl, and Patricia J. Gumport, Eds. American Higher Education in the 21st Century: Social Political, and Economic Challenges. Baltimore: The Johns Hopkins University Press.

Johnstone, D. Bruce, Alka Arora, and William Experton, (1998) The Financing and Management of Higher Education: A Status Report on Worldwide Reforms Washington, DC: The World Bank. [Prepared in conjunction with the October 1998 UNESCO World Conference on Higher Education, Paris, October 5-8, 1998.]

McMahon, W. ((1988) “Potential Resource Recovery in Higher Education in the Developing Countries and the Parents’ Expected Contribution,” Economics of Education Review, 7 (1)

Rumble, G., (1997) The Costs and Economics of Open and Distance Learning. London: Kogan Page.

Stager, David A. A. (1989) Focus on Fees: Alternative Policies for University Tuition Fees.  Toronto: Council of Ontario Universities.

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Williams, Garth (1992) Changing Patterns of Finance in Higher Education.  Buckingham, England: Society for Research into Higher Education and Open University Press.

Woodhall, Maureen. (1988) "Designing a Student Loan Programme for a Developing Country:  The Relevance of International Experience." Economics of Education Review, Vol. 7, No. 1:153-161.

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World Bank (1994) Higher Education: Lessons of Experience. Washington, DC: The World Bank.

Ziderman, A. and D. Albrecht (1995) Financing Universities in Developing Countries. Washington, DC: The Falmer Press.
 
 

10/25/99