On Cost-Sharing, Tuition Fees and Income Contingent Loans for Universal Higher Education: A New Contract Between University, Student and State?

Abstract

In the search for a viable 21st century cost-sharing contract between university, student and state, the issues of rising participation and student demand, functional differentiation, institutional competition and stratification and social inequality are systematically discussed. The argument develops through, firstly, a critical appraisal of the genre of elite, mass and universal higher education; secondly, a discussion of the consequences of US institutional stratification; and, thirdly, an assessment of national tuition fee systems as a way of sponsoring mass and universal participation. The Ivy League and the California Master Plan as well as the tuition fee systems in Australia, New Zealand and England have addressed rising participation and relative declining state funding (per FTE tertiary student) while seeking to preserve and enhance quality by mobilising and concentrating resources. Yet, the accumulated unintended consequences of theses systems are undermining their very foundations, making none of these a suitable candidate for emulation in the 21st century. Moreover, the conceptual distinction between, elite, mass and universal higher education is flawed and not suitable for guiding further reform initiatives. Consequently, it is submitted that the financing of state funded undergraduate degrees (BA) be decoupled from postgraduate degrees (MA, PhD). The rise of the European Higher Education Area with 46 member states, and more expected to join, serves as a vantage point from which to critique the legacy of the 20th century and develop preliminary policy recommendations for the 21st century.

Keywords: Higher Education funding, tuition fees, cost-sharing, income contingent loans, elite, mass and universal higher education, participation rates, Ivy League, California Master Plan, Australian Higher Education Contribution Scheme (HECS), European Higher Education Area, Bologna process

JEL Classification: H52, I20, I21, I22, I28, L33