News: New report on impact of cost-sharing

fee_studyAt a time when various models of cost-sharing have been introduced in many higher education systems and yet more are considering such measures, the impact of changes in cost-sharing is an important question. The EU funded a study conducted by DZHW and HESA to examine these questions, with nine case studies on countries like Austria, Canada, UK-England, Finland, Germany, Hungary, Poland, Portugal and South Korea.

The central question for the report is formulated as: “Do changes in cost-sharing have an impact on the behaviour of students and higher education institutions?” The study examines net costs for students (incl also living costs), and the changing balance of revenues in the budgets of higher education institutions. The key findings include the following:

In the case studies examined, introduction of cost-sharing increased overall system incomes and did not lead to substantial decrease in public funding, with the exception of financial crisis (Canada) or other extraordinary situations (i.e massive enrollment growth in Poland). It should be noted that he most recent reform in England was not included in the study due to its recent nature.

It was also highlighted that income from tuition fees does not always lead to better student experience as student-staff ratios rose despite increased revenues. Instead, the cases examined in the report showed that extra revenue was in many cases used up by expanding enrollments, administrative costs, or even subsidising research activities.

Furthermore, the report highlights that tuition fees alone did not make higher educations more responsive or market oriented. The report points towards the importance of structural incentives, including various financial and prestige incentives for particular behaviour. Furthermore, government shifts and perceived permanence of policy objectives were highlighted as one explanation for instituional behaviour and their focus on the market. In addition, responsiveness can also mean that new types of institutions are introduced instead of change in existing institutions, often more professionally oriented.

Examining overall trends, it is highlighted that the introduction of tuition fees had not had any substantial long term negative effect on enrollment rates. In general, it is concluded that: “given the high level of personal benefits of higher education, relatively small movements in fees have little to no negative effect on participation rates.

The same result is argued to be valid also for disadvantaged groups, and the potential explanation for this is found in that increases in fees have in most cases been accompanied with increases in student aid. Consequently, it is concluded that: “looking at (changing) fee levels in isolation is insufficient to explain (changes in) participation or study behaviour; at the aggregate level, it would appear that students are more sensitive to the balance of fees on the one hand and student aid on the other hand“. Because of this, the report argues, it is necessary to have more integrative approaches to institutional funding and student aid rather than view such models and factors in a separate manner.

Download the report here