The effect of fees on participation in higher education: A survey of OECD countries

Abstract

Prior to 1990, students paid nominal flat fees for tertiary education in New Zealand which was practically fully financed by public funds. Following a review of funding tertiary education, universities receive a subsidy per full‐time student and are free to determine their own fees. A range of fees, and the prospects of decreased government subsidies and rising fees, have prompted interest in the empirical evidence on the effect of fees and corresponding student support systems on the demand for higher education by different income groups. This paper provides a survey of the relevant issues and it examines evidence from the OECD countries, in particular from the US, Australia and the UK, on the effect of fees, income and socio‐economic background on participation in higher education. Cross section, time series and rate of return studies are examined. The survey further examines the extent to which participation in higher education is influenced by policies on access to education: grants, loans and quotas....