AbstractRecent discussion of future models for development in UK higher education pay insuffcient attention to the long‐term structural development of higher education systems in Europe and the USA. It is argued that, contrary to widespread belief, the US system has itselfrelied heavily on state and federal funding since the period of its major expansion in the inter‐war period. It is also suggested that the problem with the UK higher education sector is that is has always lacked the level of private funding available to the US system. There are therefore few grounds to support the view that expansion of the UK higher education sector can be based on an increased level of private finance; this has never been available to a signifiant degree, and even the US system does not noeo rely on it as much as on state funding.