Worldwide Trends in Financing Higher Education: A Conceptual Framework

The financing of higher education throughout the world has seen dramatic changes in the last decades of the 20 and the first decade of the 21 centuries. In the main, these changes in financing are responses to a worldwide phenomenon of higher educational costs tending to rise at rates considerably in excess of the corresponding rates of increase of available revenues, especially those revenues that are dependent on taxation. The consequence in most of the world has been a shortage of revenue to accommodate both the increasing costs of instruction and research as well as (and exacerbated by) the increasing revenue needs of rising enrollments. These diverging trajectories—of very rapidly increasing resource needs and more static or even faltering revenues from state budgets—must, in turn, be met by solutions either (or both) on the cost side or on the revenue side. The cost-revenue squeeze itself as well as some of the so-called solutions thereto can have a deleterious impact on both quality and capacity of universities and other institutions of postsecondary education and thus on the goal in virtually all countries to expand higher educational participation and accessibility. As the chapters in this book examine the link between higher education finance and access, this introductory chapter attempts to provide a conceptual framework for that examination in the identification of worldwide trends in the financing of higher eduction and the dominant solutions to the above mentioned cost-revenue squeeze.