Higher Education Finance

The financing of individual universities and colleges as well as entire public systems deals primarily with reconciling the ever-increasing institutional and system-wide costs with limits on the ability or willingness of both governments and families to increase revenues commensurately. This entry first discusses the reasons for rising instructional costs in higher education and limitations on instructional revenues. It then looks at solutions involving increased revenues and reduced costs.

Increasing Instructional Costs

The upward trajectory of higher educational costs in nearly all countries is a function of two accelerating factors. The first is the tendency of unit, or per-student, costs to rise at rates typically exceeding the rate of increase of costs and prices in the larger economy: that is, at or above the prevailing rate of inflation. ...

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