The global divide in tertiary education funding & student support across OECD countries

As part of the Education Indicators in Focus publication series, a new OECD study addresses the critical question “How much do tertiary students pay and what public support do they receive?” While the majority of countries have similar goals and share priorities for education, they differ significantly in the applied student fee structures, the division of spending between governments, students and private stakeholders and the provided student aid. Countries whose public institutions refrain from charging tuition fees, as in the Nordics, Slovenia, Estonia and Turkey, are contrasted by one-third of OECD countries charging fees in excess of EUR 1700 to their national students.

Private entities (including enterprises and NGOs) tend to play a greater role in funding tertiary institutions, for nations with high study fees, where those countries with progressive tax regimes often charge no or low fees.

Fees for masters studies, commonly yielding better employment and income outcomes in all countries, and those charged for a Bachelor degree are generally equivalent in two thirds of OECD countries. For other countries, such as Korea and the US, applied fees for a Master are 30% higher compared to a Bachelor, and allocated up to three times the cost in countries as Belgium and Colombia.

An emerging trend reflects an increasing number of countries, in a bid to secure sufficient funding while promoting equity and access, to look to international students, charging them higher fees – such as Sweden and Denmark where education is highly subsidized. Half of OECD members and partners that apply tuition fees, also differentiate charges according to subject/field of education. Higher operating costs but also higher income prospects of disciplines such as business and law, guide this differentiation of fees, in countries as Hungary, News Zealand and the US.

Tuition-fee structures and the related financial support provided to students differ dramatically across countries. Students who study in countries with no tuition fee are found to have access to generous subsidies, but face high taxes when entering the labour market. Students also have access to significant financial support when confronted with high tuition fees, in countries like the UK and Canada, as well as in Japan and Korea after reforms took place. Austria, France and Italy exemplify the application of low fees, but provide limited financial aid to students.

Well-developed systems for supporting students are found critical in upholding equity and widening access. Despite charging high tuition fees, countries that are committed to ensure their students have ample access to financial support systems, are found to effectively increase their access rates above the OECD average. High entry rates, such as in the Nordics, can be attributed to a combination of absent tuition fees and highly developed support, covering also living expenses. Regardless of whether students are exempt from fees, low entry rates emerge when aid is lacking.

Under the conditions of high fees, the types of student aid provided may be even more important to foster a robust system. Access and equity are promoted, risks of student debt reduced, as well as high tuition fees mitigated, when income-contingent loans and means-tested grants are applied – such as in Australia, the Netherlands and UK.

In the face of substantial differences across OECD countries, shared goals for knowledge based societies, as well as increased access and completion rates prevail - striking the balance for a publically and privately shared financing system, combined with comprehensive support for students, emerges as the common challenge.

OECD Library