Thursday, February 23, 2012

Increasing higher education access: one goal, many approaches

by J.D. LaRock
Senior Analyst, Innovation and Measuring Progress Division, Directorate for Education

Few would dispute that having a higher education is more important than ever to help people build positive economic futures and strengthen the knowledge economies of countries. Yet as the second issue of the OECD’s new brief series Education Indicators in Focus explains, OECD countries have adopted dramatically different strategies for increasing higher education access – both in terms of how higher education is financed, and in the level of financial support they provide to individuals seeking a degree.

For example, in countries with more progressive tax structures, such as Denmark, Finland, Iceland, Norway and Sweden, students pay low or no tuition fees and have access to generous public subsidies for higher education. Tuition fees are much higher in Australia, Canada, New Zealand, the Netherlands and the United States, but students in these countries also have access to significant financial support.

Before recent reforms in Japan and in Korea, students paid comparatively high tuition fees, but had relatively low access to public subsidies. Meanwhile, in Austria, Belgium, the Czech Republic, France, Ireland, Italy, Portugal, Switzerland, Spain and Mexico, students pay little or nothing for higher education, but have limited access to financial aid.

At a time when most OECD countries are experiencing surges in higher education enrolments – but also face significant budget constraints – which model stands a better chance of promoting higher education access and positive outcomes for students in the most equitable way? As it turns out, there’s something to be learned from several of them.

As detailed in the OECD’s thematic review of higher education, charging a moderate level of tuition fees – while simultaneously giving students opportunities to benefit from comprehensive financial aid systems – is an effective way for countries to increase access to higher education, stretch limited public funds, and promote equity by acknowledging the significant private returns that students receive from higher education.

In particular, access to robust financial aid seems to be the key.  For example, countries with especially well-developed student support systems – like Australia, New Zealand, the United Kingdom and the United States – all have above-average university entry rates, even though they also have comparatively high tuition fees.

At the same time, the type of financial aid countries offer is also critical. The OECD’s review suggests that financial aid systems that couple means-tested grants and loans that have income-contingent repayments not only promote access and equity at the front end of higher education, but also lead to better outcomes for students at the back end. Australia and New Zealand have used this approach to mitigate the impact of high tuition fees, encourage disadvantaged students to enter higher education, and reduce the risks of high student loan indebtedness. Other OECD countries that use this strategy include Chile, the Netherlands, the United Kingdom, and the United States.

Increasingly, countries are adjusting their higher education financing and support systems in other ways as well. For example, more countries have raised tuition fees for international students in recent years, in part to shore up the finances of their higher education systems. At least 14 OECD member and partner countries differentiate tuition fees among fields of study to account for the higher cost of operating some academic programmes.  Some countries like Australia have even attempted to link higher education charges to labour-market opportunities by lowering tuition fees for fields with skills shortages.

In an era of booming enrolments and tightening belts, it won’t be surprising if still more changes are on the horizon.

For more information
On this topic, visit:
Education Indicators in Focus
On the OECD’s education indicators, visit:
Education at a Glance 2011: OECD Indicators  www.oecd.org/edu/eag2011
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure

Related blog post:
Higher education: an insurance policy against global downturns

Chart excludes OECD countries for which specific data on public subsidies is not available.
Source: Education at a Glance 2011: OECD Indicators, Indicator B5 (www.oecd.org/edu/eag2011).

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Anonymous said...

How is it for Korea and China? I don't believe Japan is only one country to locate upper left.

JD LaRock said...

Dear Anonymous,

Thanks for your question. Like Japan, Korea has implemented reforms designed to offer more public subsidies to higher education students. So while in past years Korea could have been characterised as a "higher-fee, lower aid" country, it is now closer to the group of countries in the "higher fee, higher aid" category. Unfortunately, the OECD does not have data student subsidies for China at the present time.