ABSTRACT
Financing of higher education (HE) is an important policy concern across countries due to the critical role of HE in the era of globalisation, internationalisation and transnational policies for growth and development. Many developing countries realising the crucial role of HE for social mobility, knowledge creation and economic growth have reemphasised upon their policies to finance HE. Earlier theories such as Human Capital theory and the screening models also realised the importance of investment on HE to enhance productivity. The positive externalities generated from HE and the social returns projected for future from HE have ensured the role of the government to finance it. However, there are arguments considering HE as a quasi-public good due to higher private returns received from it by the students. Such nature of HE and the market intervention in HE decision-making as argued to improve efficiency persuade for a decline in public subsidies and sharing of the cost of HE with the students/households. Besides, with the expansion in enrolments in HE across countries and the competing demand for public funds for other important sectors like health, primary education, defence and more recently the COVID pandemic like situations etc., it was realised by policy-makers to explore alternative and innovative sources of financing for HE along with the public financing of HE. This chapter gives a wider perspective to the financing options in higher education in other countries and that explored in India.
