University funding and student funding: international comparisons

Abstract

In this article we compare the mechanisms for funding higher education institutions across a set of OECD countries. First, some data on public and private funding levels are presented. The article then discusses two important trends: (i) the increased presence of cost sharing and (ii) the move towards performance-based funding. We show where countries differ in terms of the fees paid by students and the financial support received by students. Using the degree of output orientation and the degree of centralization as dimensions to classify the various countries’ funding mechanisms, differences may be shown between countries. Reforms in funding approaches, inspired by new public management thinking, are discussed. One such reform is the introduction of performance agreements that increasingly underlie the public budget of universities. We focus on the drivers of the reforms and the question of whether these reforms actually matter for the performance of national higher education systems—for instance on the issue of student completion rates.