Fiscal Stress: Worldwide Trends in Higher Education Finance

While higher education is regarded of high priority in boosting economic development, public budgets to sustain expansion of higher education systems remain limited around the globe. In practice, this situation of fiscal stress creates an impetus for governments to develop various strategies to meet the growing demand¿from both students and society--for higher education services. This article explores worldwide trends to cope with this issue. We address policy developments aimed at increased efficiency in higher education, such as development towards institutional autonomy and performance-based funding. In addition, we show that the issue of cost-sharing is gaining worldwide importance. Students and their families are required to pay larger shares of educational costs, as demonstrated in tuition and student aid policies in many countries. Finally, the paper explores how internationalization can help relieve fiscal stress.