Should university education be free?

The title of the recent blog written by my colleague Harry Patrinos couldn’t be more direct and clear: “Make the Rich Pay for University”! This is an idea that makes sense. However, is this idea as easy to implement as it sounds? Are there any disadvantages or limitations? What is the rationale used in countries that have opted for the opposite direction?

It’s true that a great majority of countries, in recent years, have been leaning towards a model in which an increased share of tertiary education costs is paid for by students and their families, either by direct tuition fees or by loan mechanisms allowing students to pay once they graduate. In opting for this approach, in a context of limited public resources, the assumption from policy makers has been that a share of the tertiary education costs could be paid by families with more economic possibilities in order to make it affordable to the ones with limited resources. However, the devil is in the details. For instance, in many cases, a clear link between additional revenues for institutions and corresponding increased resources to support underprivileged students has yet to be firmly established.

In addition to this, we should take into consideration that there are a variety of factors transcending the mere simple policy decision that’s just about tuition fees. This includes, for instance, the role of politics in influencing government policies on tertiary education. About 16 years ago, in my own country of Mexico, there was an attempt to establish a progressive fee at the National University (UNAM) that linked tuition fees to family income. This led to a long-standing student strike which ended with the Rector’s resignation and the reversal of the plans. Today, UNAM students pay a symbolic annual fee of only $0.13, regardless of socio-economic status. This makes tertiary education accessible to at least half of UNAM students who, due to their limited family income, would otherwise not be able to attend. However, it also leaves a quarter of well-off students without contributing to their institution, when it is clearly within their capacity to do so. Is this regressive? Certainly.

Of course, each country has a unique set of historical, economic, social and political circumstances explaining the funding model that its tertiary education has. Nevertheless, it may be worthwhile to analyze two specific clusters:

Countries with limited resources and high levels of inequality

In places where significant socio-economic inequality exists, free tertiary education tends to exacerbate rather than blur social stratification. It becomes regressive, especially in the case where richer students are mostly the ones with access to elite, publicly-funded tertiary education institutions.  These students tend to already be exposed, in their previous education levels, to better academic opportunities and more resources.  This unfortunate situation leaves students with fewer economic resources and weaker academic preparation to lower quality and, in many cases, fee-paid tertiary education institutions. The accumulated gap in access, quality and accumulated debt, results in a very visible segmentation of students and, eventually, of society at large.

That’s why it makes sense to insist, as Harry Patrinos indicates, that there is fairness in having richer students pay a larger share of their tertiary education costs. But this is only one step. Confining decisions to fee-based policies may only diminish attention to other equally significant problems. In fact, without careful planning and adequate follow-up, fee-based policies may result in the long run in a reduction of resources for tertiary education institutions. In some countries, governments presume that institutions can rely more on tuition fees so they allocate funds to other priorities. The greater challenge in tertiary education is not only about fees but, more importantly, about quality and the relevance of education with equitable access (for which fees become a significant, but not the only tool).

The road from policy design to the practical implementation of differential tuition fees is long and laden with obstacles to be taken in consideration in order to avoid failure on a policy that makes a lot of sense, especially in countries with significant inequality. Otherwise, good decisions may lead to bad practices. For instance, in countries with low levels of accountability and latent information systems, a differential tuition scheme may result in unfair decisions and corrupt practices when the basis to determine a student’s income bracket is plagued with inconsistencies and limited reliability.

Countries with greater access to resources and low inequality levels

How about countries with higher socio-economic equality levels, and who offer free tertiary education to all regardless of family income? In Nordic countries, for instance, the assumption is that tertiary education is a public good for which society at large should make it available to anyone, and also bear its cost. The belief is that the societal investment—collected via higher taxes—be made to make tertiary education affordable is a sound policy which will eventually result in better-prepared individuals capable of giving back to society. Quality education is considered a must at all education levels and it reduces the knowledge gap with which students start their tertiary education studies. In addition, the share of public financial resources available to support education is also quite large.

The picture is not as rosy as it seems, because an important assumption is that plenty of resources are available to properly address such social entitlement. However, some countries who offer similar no-fee tertiary education, but who have limited and shrinking public funds have been experiencing a decline in the overall funding for tertiary education. This has resulted in increased and legitimate concerns about the quality of education.

A reality check

The case of Nordic countries is aspirational for many but, in practice, a great majority of students around the world live in countries where significant inequality persists, and where limited public resources are available. That’s why a comprehensive set of policies –not only the ones related to fees- should be in place to ensure that a progressive equity goal is achieved.

These include:

• Better integration of tertiary education with previous levels of good education;
• Greater relevance and flexibility of academic offerings;
• Increased autonomy to tertiary education institutions paired with related accountability;
• Leveling the playing field so that quality education (public or private) is available to all students, and;
• Establishing financial mechanisms that support students on an equitable basis.

At the end of the day, the solution is not only about fees. It’s about ensuring that tertiary education can effectively respond to the emerging needs of society and for it to reaffirm its role as one of the most important enablers of equitable and prosperous communities in today and tomorrow’s world.

This post first appeared on The World Bank’s Education for Global Development Blog.. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Francisco Marmolejo is the World Bank’s Lead Tertiary Education Specialist and Coordinator of its Network of Higher Education Specialists.