ABSTRACT
To redress the declining relative resource base for higher education, many institutions and systems as a whole must draw on new funding sources. Greater cost-recovery (for instruction and/or lodging and meals) will be essential to resolve financial problems and to ensure that resources are proportional to student numbers. It will also encourage efficiency in the use of resources as providers become accountable to students. Finally, in a market oriented economy, income from tuition fees will give institutions important signals about employment demand since institutions would operate under incentives to respond to student demand in order to capture their resources. The focus of this chapter will be on increasing the mobilization of private resources from students at public institutions, although promoting fully private institutions will be discussed tangentially. It goes without saying that fee policy is perhaps the most politically sensitive area of reform. The goal of this chapter is to review some of the theoretical rationales for greater fee payments in terms of ability to pay, then to compare this theory with actual practice as well as to review the constraints that many governments face in terms of raising student contributions, and finally, to discuss four different strategies that governments might pursue.
