Loans, grants – what else?

Nieuws | de redactie
24 februari 2012 | OECD data shows that a mix of loan and grant financing with moderate tuition fees is most effective in widening HE access given tight budgets. Some countries come up with even more creative solutions linking tuition fees to skills short on the labor market.

A report by the OECD highlights how much itsmember states vary in their policies towards higher educationfinancing. Especially “in countries with more progressive taxstructures, such as Denmark, Finland, Iceland, Norway and Sweden,students pay low or no tuition fees and have access to generouspublic subsidies for higher education, but face high income taxrates. By contrast, tuition fees can be much higher in Australia,Canada, New Zealand, the Netherlands and the United States, thoughstudents in these countries also have access to significantfinancial support.”

Average tuition fees in $(y-axis)
vs. % of students receiving subsidies (x-axis)

Average tuition fees vs. public subsidies

Taking into higher education participation in the respectivecountries, the OECD suggests that “student financial supportsystems that provide both loans with income-contingentrepayments and means-testedgrants  not only promote access and equity atthe front end of higher education, but also lead to better outcomesfor students at the back end.”

“Charging a moderate level of tuition fees – whilesimultaneously giving students opportunities to benefit fromcomprehensive financial aid systems – is an effective way forcountries to increase access to higher education, make efficientuse of limited public funds, and acknowledge the significantprivate returns that students receive from higher education.”

“While what constitutes ‘moderate’ is not easy to define, OECDcountries that charge for higher education most commonly haveaverage annual tuition fees ranging from $800 to $1,300 per yearfor full-time national students enrolled in university-levelprogrammes.”

Tying tuition fees to skills shortage

Next to student loans and grants, a number of differentapproaches have become increasingly popular. “Some countries withhighly subsidised higher education systems, such as Denmark andSweden, increased tuition fees for non-European Union students inrecent years, joining a long list of countries that charge higherrates for international students.”

“At least 14 OECD member and partner countries differentiatetuition fees among fields of study to account for the higher costof operating some academic programmes. Australia has even attemptedto link the level of fees to labour-market opportunities bylowering tuition fees for fields with skills shortages, in order toattract more students.”

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