For a Kinder, Gentler Society
Financing Higher Education in a Global Market
  • Steve O. Michael
  • Mark Kretovics
Reviews Table of Contents Introduction «Back
Financing Higher Education in a Global Market.
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This textbook discusses various approaches to the financing of Higher Education as implemented in countries from the US to Thailand, and analyzes the effects of different funding policies on different cohorts of students. The book is geared to university programs, graduate seminars, and college/university administration personnel concerned with the high cost of tertiary education, especially tuition pricing and student aid, and how higher education finance policy affects access to colleges and universities.


About the Author

Steve O. Michael is Professor of Higher Education Administration and Vice Provost for University Diversity and Academic Initiatives at Kent State University. He has authored/co-authored several books and articles since 1990.

Mark Kretovics is Assistant Professor of Higher Education Administration and coordinator of the master’s degree in Higher Education at the Graduate School and College of Education, Kent State University.

About the Book

From Austria to India, university administrators and public policy makers are grappling with the high costs of higher education. Comparing the models by which higher education is funded in the United States and seven other countries, developed...

From Austria to India, university administrators and public policy makers are grappling with the high costs of higher education. Comparing the models by which higher education is funded in the United States and seven other countries, developed and developing, the chapters of this textbook help identify effective financial strategies to meet fast-evolving demands.

How can each nation and each institution achieve the right balance between quality and quantity, access and equity, need-based and merit-based aid, government funding and private endowments? In these 9 chapters, case studies discuss the different approaches being taken and the varying results produced.

This handbook on the finance of higher education is essential reading for  college administrators, policy-makers, and graduate programs in higher education administration.


Introduction

If there was ever a time when higher education needed sustained scholarly reflection on finance, it is now. The reality of globalization for higher education suggests an increase in competition—competition for students, faculty, and resources. Member states of the European Union are currently making a speedy and concerted...

If there was ever a time when higher education needed sustained scholarly reflection on finance, it is now. The reality of globalization for higher education suggests an increase in competition—competition for students, faculty, and resources. Member states of the European Union are currently making a speedy and concerted effort to harmonize their curricula and educational processes. This exercise fosters greater mobility among students and faculty. Where mobility is enhanced, competition among service providers intensifies. Technology has brought tremendous progress to distance education. Spiru Haret University in Romania boasts of its educational broadcast that covers most of Europe. University of Phoenix in the United States currently boasts of over 200,000 students spread across the world. Certainly, it is no longer business as usual in higher education. Yet there are very few books on higher education finance; and even fewer are those that attempt to treat this important subject within an international context. There is a reason for this. A colleague from Great Britain described it this way:

One thing we all know is that without money we cannot do what we are doing. However, I doubt if any of us can articulate with absolute certainty how money produces effects on education outcome. The actors are constantly changing, the issues are complex, the constraints are many — not to talk about the ubiquitous politics that one needs to contend with. Almost every time we try to write, events overtake our reasoning before the ink dries on the prints.

With a statement like this from an invited contributor, the temptation to lay down the tools and quit was high. Still, the changes and challenges are exciting. Government’s ability to control and confine education to its borders is fast eroding. With Internet and satellite systems, it will become harder to police foreign educational outreach. Yet, higher education has never been so important in the hand of government as an instrument by which to effect socio-political and economic policies. Governments must worry about brain drain, about research outcomes getting into the hands of “rogue nations” and terrorists (not to mention commercial competitors), about the cost of higher education, and about access for its citizenry. Finance has a significant role to play in every higher education decision, yet we know and talk little about it. Admittedly, we all complain about insufficient budgets, but serious academic analysis that is expressed to decision makers in an understandable language is rare. The primary goal of this book is to discuss how higher education is financed in participating countries. Contributors were encouraged to eliminate the jargons of economics of education and to present information that is comprehensible to higher education decision makers. Experience has shown that most higher education decision makers have little or no background in economics or finance and, frankly speaking, may not be interested in economics. Many people have thin patience for complex equations, and those equations are hardly called to mind when one is confronted with real life challenges. While some contributors may have succeeded better than others in simplifying complex concepts, it is my hope that the majority of this book’s readers will find it useful, informative, and readable….


Table of Contents
Chapter 1. Financing Higher Education In A Global Market: A Contextual Background 3 Introduction 3Importance Of Higher Education 4General Trends 11Greater

Chapter 1. Financing Higher Education In A Global Market: A Contextual Background 3

Introduction 3

Importance Of Higher Education 4

General Trends 11

Greater Participation 12

Greater Institutional Diversification 12

Greater Student Diversity 13

Greater Diversification of Sources of Funding 15

Greater Accountability and Control 17

Greater Privatization 18

Greater User-Pay 19

A Growing Popularity of Performance Funding 21

Greater Cost Consciousness 21

Commercial Ranking of Institutions 22

Concluding Principles Of Higher Education 24

The Principle of Diversified Higher Education System 25

The Principle of Autonomy 26

The Principle of Responsive Higher Education System 27

Funding For Excellence 29

Organization Of This Book 30

References 32

Chapter 2. Financing Higher Education In The U.S.A: Strategies For The 21st Century 33

Introduction 33

Higher Education Structure 34

Historical Trends 37

Higher Education Revenue Trends 40

Government Appropriations 45

Tuition and Fees 47

Endowment Market 47

Higher Education Cost Structure 50

Higher Education Funding For Equity 54

Access Conditions 59

Addressing the Issue of Equity 59

Challenges Of The 21st Century 63

Summary And Conclusion 68

References 69

Chapter 3. Financing Higher Education In Canada 71

Introduction 71

Historical Development 74

The Current Condition 79

Access 82

Tuition Fees, Accessibility, And Quality 84

Sources Of Revenue 88

Tuition Fees 90

Operating Grants 94

Other Income 96

Cost Structure 99

Institutional Autonomy 105

Changing Trends 107

Faculty Roles and Rewards 111

Infrastructure 112

Financing For The 21st Century 115

References 118

Chapter 4. Great Expectations And Declining Resources:Financing Higher Education In Mexico 121

Introduction 121

Higher Education In Mexico 123

Too Little, Too Much? 125

The Logic of Funding in the 1970s through the 1990s 127

The 1990s: Diversification of Funding 132

Financial Policies And Their Impact 140

Conclusions And Recommendations 144

References 147

Chapter 5. Higher Education Policy And Finance In Spain 149

Introduction 149

Recent Historical Development Of Spanish Higher Education 150

General Structure And Current Situation Of The System 153

Access To Higher Education And Equity-Related

Finance Policies 156

General Traits Of The Higher Education Finance Policy 159

Sources Of Revenue And Cost Structure 160

Sources of Revenue 160

Cost Structure 162

Institutional Autonomy and Evaluation 163

Academic Staff: Roles and Reward 164

Financing For The 21st Century:

The Challenges Of Globalization 165

Conclusions And Recommendations 167

References 171

Chapter 6. Financing Higher Education In Austria And Future Challenges 173

Introduction 173

General Context 175

Political and Demographic Context 175

The Fabric of Higher Education 175

Access 180

Free Access 180

Massification 181

Social-Economic Status Of Students 183

Student Assistance 184

Institutional Autonomy 188

Sources Of Revenues 191

Universities 191

Fachhochschulen 193

Private Universities 194

Tuition Fees 194

Cost Structure 196

Faculty Roles and Reward 198

Higher Education Infrastructure 200

Higher Education Buildings 201

Libraries 203

Other Infrastructure 203

Conclusions 204

References 209

Chapter 7. Financing Higher Education In South Africa And Future Challenges 211

Introduction 211

Historical Development 212

Current Condition 220

Earmarked funds for institutional redress 225

Earmarked funds for student financial aid 225

Earmarked funds for other specific purposes 226

Access In General 227

Sources Of Revenue 229

Cost Structure 232

The Constant N 235

C-Values 235

Increase in subsidy students from the previous maximum 236

K-Factors 236

Institutional Autonomy 240

Faculty Roles And Reward 242

Higher Education Infrastructure 245

Conclusion And Recommendations 249

References 252

Appendix A. Abbreviations Used 255

Appendix B. A Simplified Breakdown Of The Subsidy Formula 256

Chapter 8. Financing Higher Education In India Under Structural Adjustment 257

Global Economic Crisis And Adjustment 257

India’s Economy Under Adjustment 261

Effects Of Adjustment On Education 265

How Does Higher Education In India Respond To Adjustment Measures? 267

Decline In Budget Allocations 268

Shifts In Higher Education Policy 281

Student Fees 283

Student Loans 285

Privatization 286

Neglect Of Higher Education 288

Concluding Observations 288

References 399

Chapter 9. Financing Higher Education In Thailand And Future Challenges 301

Introduction 301

Background 303

Higher Education Finance In The Context Of

Economic Sustainability 304

Importance Of Higher Education To Sustainable

Economic And Social Growth 307

National Education Budget 309

Government Expenditure 310

New Financial Mechanisms 311

Educational Loans 311

Private Sector Support 312

Autonomy 314

Stimulation Of Research And Development 315

Issues Of Equity 316

Promising Projects And Programs 317

Conclusion 318

References 322

Excerpt

CONTRIBUTORS

Jorge Calero is Professor of Applied Economics (University of Barcelona) and President of the Spanish Association of the Economics of Education (AEDE). His research areas are the economics of education and the economics of the welfare state, with special reference to inequality issues.

Mark A. Kretovics is Assistant Professor of Higher Education Administration and coordinator of the master’s degree in Higher Education...

CONTRIBUTORS

Jorge Calero is Professor of Applied Economics (University of Barcelona) and President of the Spanish Association of the Economics of Education (AEDE). His research areas are the economics of education and the economics of the welfare state, with special reference to inequality issues.

Mark A. Kretovics is Assistant Professor of Higher Education Administration and coordinator of the master’s degree in Higher Education at the Graduate School and College of Education, Kent State University. His current research interests include the application of business strategies to higher education institutional management, learning organizations, organizational politics, outcomes assessment, distance education, and compressed course teaching. He received his Ph.D. from Colorado State University and also holds an MBA and an MS in Counseling.

Daniel W. Lang is Professor at Division of Management, the Ontario Institute for Studies in Education of the University of Toronto (OISE/UT). Prior to taking up an appointment at OISE/UT, Professor Lang was Vice Provost (Planning and Budget) at the University of Toronto, where he also held the positions of University Registrar, Vice President, Computing and Communications, and Senior Policy Advisor to the President. In addition to his appointment at OISE/UT, Mr. Lang holds an appointment in the Division of Management and Economics at the University of Toronto-Scarborough. He is Chair of the council of Ontario Universities Committee on Accountability. He is also Head Coach of the University Toronto Varsity Blues baseball team. Professor Lang’s current research interests include finance, management, budgeting, planning, system organization and policy, inter-institutional planning and cooperation, accountability and performance indicators, and history. Dr. Lang received his doctorate from the University of Toronto.

Elsa Hackl is currently a Professor in the Department of Political Science of Vienna University. She holds a Master's Degree in Law and a Doctoral Degree in Politics. Dr. Hackl has worked as a civil servant in a senior position (director at the Austrian Ministry for Education, Research and Culture), was Visiting Fellow at the University of British Columbia, Canada and at the European University Institute, Florence, continues to work as an expert for OECD, the Council of Europe and Salzburg Seminar. Her current research interests include Education policy, Europeanisation /internationalization, public administration.

Steve O. Michael is Professor of Higher Education Administration and Vice Provost for University Diversity and Academic Initiatives at Kent State University. Prior to his current position, he held the positions of Interim Associate Dean of Education, Director of the Center for International and Intercultural Education, and Coordinator of the Higher Education Administration Doctoral Program. His research interest includes the application of business strategies to institutional management, higher education finance, diversity in higher education, academic program reviews and discontinuation, internationalization of higher education, and marketing of education. Dr. Michael was a British Commonwealth Scholar and the first recipient of the Sheffield Award for the best article published in the Canadian Journal of Higher Education (1992). He was also an American Council on Education (ACE) Fellow under President Jared Cohon of Carnegie Mellon University, Vice Chancellor Vandelinde of University of Bath, and Vice Chancellor David Rhind of the City University of London in 2000-2001. Dr. Michael received his doctorate from University of Alberta, Canada.

Hans Pechar is an associate professor at the Faculty for Interdisciplinary Studies (IFF), University of Klagenfurt, Austria, and head of the department for Higher Education Research. His research topics are comparative higher education and economics of higher education. Recent publications include Accreditation in higher education in Britain and Austria: two cultures, two time-frames, in: Tertiary Education and Management, Vol.8: 231-242 (2002); In Search of a New Profession. Transformation of Academic Management in Austrian Universities, in: Alberto Amaral, Lynn Meek and Ingrid M Larsen (eds.): The Higher Education Managerial Revolution, Kluwer 2003, (p.79-99); Backlash or Modernisation? Two Reform Cycles in Austrian Higher Education, in: Alberto Amaral, Maurice Kogan and Ase Gornitzka (eds.): Reform and Change in Higher Education — Policy Implementation Analysis, Kluwer 2004 (forthcoming); and Towards a European Higher Education Area: reform pressures on Austria, in: European Journal of Education 2004 (forthcoming) (with Ada Pellert).

Rick Rantz currently serves as Director of the Chester Campus of Feather River College in Northern California, a position he accepted after completing his doctoral course work in higher education at the University of Houston. His published research and conference presentations have focused on leadership relative to the college presidency, small group dynamics and higher education finance in developing countries. As an undergraduate student, Mr. Rantz studied in Mexico City, and he has taught at several institutions in the United States, at the Colegio Americano de Guayaquil in Ecuador and at Asociación Escuelas Lincoln, in Buenos Aires, Argentina. As a doctoral student, Mr. Rantz traveled to Thailand on two extended occasions to study the higher education system of that country and once to the People’s Republic of China for the same purpose. His dissertation examines the impact that collaborative learning has on undergraduate cognitive and non-cognitive gains. Mr. Rantz holds at bachelor’s degree from the United States International University in San Diego and a master’s degree from Skidmore College in New York.

Prakash Singh is an associate professor of leadership and strategic management at the University of Port Elizabeth, South Africa. His academic focus is largely on educational leadership at the masters’ and doctoral levels. He was awarded a Senior Researcher’s Fulbright grant in 1998 which enabled him to conduct research on high risk students and cognitive dissonance from a base at the University of Missouri, Kansas City. He served as a member of the Task Team that investigated the state of educational management development in South Africa in 1996. He is a founding member of the Education Management Association of South Africa. Currently, he is serving as a member of the Standard Generating Body for educational leadership and management qualifications in higher education. Presently, he is conducting research on the challenges facing informal settlement learners in South Africa.

Phasina Tangchuang is Associate Professor of Adult/Non-Formal Education and a senior researcher at the Center for Education and Labor Studies (CELS), Chiang Mai University. Her research work includes Development of Educational Management Model in Doctoral Degree Level in the Field of Humanity and Social Science; synthesis of Research Papers Funded by the Faculty of Education; Employment Skills and Education. She is an advisor to many master’s and doctoral students and she is currently a visiting professor at Naresuan University. Dr. Tangchuang is the author of several books in Organization Development, Curriculum Development, Policy and Educational Planning, Applied Psychology for Non-Formal Education, and Educational Personnel Management.

Jan Thomas is currently a research fellow at the Department for Higher Education Research, Faculty for Interdisciplinary Studies, University of Klagenfurt at Vienna (Austria) and associate lecturer for “learning and teaching with new media” at the Ruhr-Universität Bochum (Germany). He has studied Education, Humanities and Theology at Hamburg, Passau and Vienna Universities and holds postgraduate degrees in Educational Sciences, Philosophy of Education and German Studies. His current research interests include comparative studies on academic degree systems, management issues in part-time postgraduate programs and the implementation of staff development programs in (and through) web-based learning.

Jandhyala B G Tilak is Professor and Senior Fellow and Head of the Educational Finance Unit at the National Institute of Educational Planning and Administration, New Delhi. Holding a doctorate from the Delhi School of Economics, Professor Tilak had taught in the Indian Institute of Education and the University of Delhi, and as a Visiting Professor in Economics at the Sri Sathya Sai Institute of Higher Learning, University of Virginia and Hiroshima University. An economist of education, Dr Tilak was also on the staff of the World Bank, Washington DC. Dr Tilak’s publications include seven books and more than 200 research papers published in professional journals in the areas of economics, development studies and education. He is also the Editor of the Journal of Educational Planning and Administration, and is on the editorial board of several journals. He is the recipient of the UGC Sri Pranavananda Saraswati national award for outstanding research in education, and Dr Malcolm Adiseshiah award for distinguished contributions to development studies.

Wietse de Vries is a senior researcher at the Autonomous University of Puebla (BUAP), Mexico. He specializes in public policies and their effect on higher education, the impact of evaluation funding mechanisms, and changes in the working conditions of faculty and students. He has worked on several international comparative projects. Over the last years he has combined academic work with that of director of planning and institutional research at the BUAP, and is currently a visiting professor at the University of British Columbia, Canada.



Pages 344
Year: 2004
LC Classification: LB2342.F516
Dewey code: 379.1'18—dc22
BISAC: EDU013000
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