Funding post-compulsory education

The chapter sets out a strategy for financing post-compulsory education in pursuit of quality (better), access (wider) and size (large enough to meet growing demand for skills) particularly relevant for European countries facing fiscal constraints and mostly with only limited mechanisms for cost sharing, and the USA, which has a badly designed system. The chapter sets out a series of principles including cost-sharing, insurance, fiscal parsimony of loan design and a continuing role for government. Subsequent discussion explains some common analytical errors. The policy core of the chapter is a strategy with four elements (a) tuition fees as a complement to taxpayer finance; (b) regulation, including robust quality assurance; (c) income-contingent loans to help students address credit constraints and (d) policies to address impediments to participation that arise earlier in the system. Evidence from reforms in England in 2006 provides empirical support for the strategy. A concluding section maps out some unfinished business.