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Universities and students face grim financial future

University affordability for students in 40 countries around the world may have reached its peak, according to a report released this week.

Across countries in the OECD, government support for higher education only barely kept up with inflation last year while the outlook for 2012 looks bleak “given the debt crisis in the Eurozone”, the report states.

It says that while tuition fees in Australia fell by nearly 1% in real terms between 2010 and 2011, this compares with a 5% fee rise in America and a 6% jump in South Africa.

‘Affordability’ in the report relates to changes in tuition fees adjusted for changes in student aid.

In this way, America was the only one of the nearly 40 countries surveyed where financial assistance available to students was cut and fees were increased. The year-round Pell Grant system was eliminated and several other grant programmes were cut or dropped for the 2011-12 academic year.

“Students in the United States appeared to experience the greatest decrease in affordability in
2011, as they faced increases in tuition fees that exceeded inflation coupled with decreases in available financial assistance. Neither trend is expected to reverse course in the next two years,” the report says.

The 72-page report, Global Changes in Tuition Fee Policies and Student Assistance, was prepared by Alex Usher and Pam Marcucci of the Canadian consulting group Higher Education Strategy Associates.

They have devised a new “global tuition fee index” that compares the costs of going to university in the 40 countries with more than 90% of the world’s post-secondary enrolments.

As well as describing tuition fees in the various countries, the authors also outline student loan and financial assistance arrangements. Drawing on data from the 40 nations, the report says cuts in higher education spending occurred across the globe in 2011 but were especially heavy in Brazil, Italy, Pakistan and the Ukraine.

Universities in America, Britain, Japan, the Netherlands, the Philippines, South Korea, Spain, and Thailand also saw public funding fall. It says students in Britain, Italy, Israel, the Philippines, South Korea, Spain and Switzerland, also faced tuition fee rises with no increases in financial assistance.

In the Philippines, 80% of public deregulated universities and colleges raised their fees by 5% to 10% last year “and it looks likely that the government will allow tuition fee increases in 2012 in state universities as well”.

The report says students in France, Germany, Sweden and Saudi Arabia appear to be facing decreasing barriers to higher education given that there were increases in financial assistance without any changes in tuition fees. Similarly, in Colombia, small tuition fee increases were more than matched with significant boosts to financial aid.

“Even in those countries where governments have maintained or increased higher education funding levels, however, the trend towards more private investment continues unabated,” it says.

“This means that higher education systems will come under greater pressure to extract revenue from students.”

The report says that in virtually every region of the world, increasing enrolments, rising costs and the “ongoing competition for public resources from other critical public sector services”, have forced universities to generate additional income from higher tuition fees, donations, faculty consulting and hiring out their facilities.

Concerns about access and equity, however, have also led to changes in financial assistance policies aimed at mitigating the negative effects of decreased government investment in higher education.

“Demographic changes and massification trends also continued to impact higher education systems around the world in 2011. Governments and institutions in countries where the cohorts are declining in size (such as Japan, South Korea and Taiwan) are looking to stave off contraction in the higher education sector by appealing to non-traditional local students and attracting international students.

“This means that higher education systems will come under greater pressure to extract revenue from students.” the report states.

“While public sector higher education expenditure is growing, in many cases demand is growing even faster, which means that even in countries where funding is going up, one finds upward pressure on tuition and student aid through greater payment of fees to both public and private higher education institutions.

“Countries in the developing world experiencing both significant population growth, such as Brazil, India, much of Africa, and rising participation rates are struggling to accommodate ever-increasing numbers of qualified students into higher education with limited government resources. Moreover, many of these countries are intensifying their efforts to expand participation among previously marginalised groups of students.”
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