Discontinuity Countries with Big Shifts in Fee Policy
In the cases of England (1998 and 2006), Austria from 2001 and Germany (from 2006), both the share of students paying fees and the average fees increased. In Austria and Germany this was because fees were introduced. In the case of England (1998), fees were introduced, but there were waivers for certain student groups; from 2006 almost all students were paying fees and the fees had also risen to higher levels. The share of students paying fees stayed the same in the newest 2012 reform in England, but the fee levels rose again. In the case of Portugal, fees were introduced in 2003 and rose insubstantially until 2010. That makes England, in the most recent period, and Portugal in some ways similar to the continuity countries.
In the cases of Austria (2009) and Germany (following 2011), both the share of students paying fees and the average amount of fees decreased. In the cases of Austria and Germany, this was because the fees that had been introduced earlier in the 2000s were abolished (for all, but a small group of students).
Continuity with Some Shifts in Fee Policy
South Korea and Canada are examples of countries in which fees are a common part of the funding constellation for higher education. In both countries fees rose over time, but there was no substantial change to the share of students paying these fees. Thus, although the countries have fees, they are viewed as continuity countries in the analysis.
In the case of Hungary and Poland, the share of students paying fees decreased over time, which was to some extent made possible by the declining number of students due to demographic change (Orr et al. 2014a, p. 35). In Poland this development even led to fees decreasing on average.
In the case of Finland, aside from an experiment with fees for some foreign students, neither the policy on the amount of students paying fees (none), nor the fee level (zero) changed over the time period observed in the study.
Analysis and Results
The four hypotheses were tested by analysing statistical and survey data from nine countries, and by conducting interviews with key national informants. The concept of discontinuity versus continuity policies was used to identify the most interesting differences, although some changes in other areas of funding policy also made the continuity countries illuminating. The results of the analysis are summarised below.
In general, public funds to institutions do not decrease as private funds increase— not even on a per-student basis.
An analysis of the data for the case-study countries shows that over the 15 year period of investigation, the general trend has been that public funding per student has increased, although this was not a constant upwards climb in most cases. Cases in which public income decreased signiﬁcantly over longer stretches of time are Canada in the late 1990s, South Korea 1999–2001, England post-2007, or Austria 2004–2009. Further research suggests that these decreases in public per-student income have one of two main causes: either a serious economic downturn—this was the case in Canada in the early 1990s (with effects on public spending being delayed into the late 1990s), and in South Korea after the currency crisis of 1997/1998; or a fast enrolment growth, as in Poland in the 1990s to mid-2000s, and, albeit less pronounced, in Austria in the 2000s. In England, both factors appear to have worked together after 2007. Figure 2 shows the development of per-student income from fees and the public purse, which increased in parallel until 2007, when a system change becomes evident. In this case, therefore, England can be seen to be the only country in the set of case-study countries where HEI income is now largely increasing due to student fees. At the same time, this analysis hides the fact that the fees in England are offered to students as deferred payments, which they only begin to pay once they start earning a substantial wage. Until this point, the fees are indirectly funded through the public purse.
The conclusion, suggested by observations of the cases, is that the main principle of higher education funding remains “public ﬁrst”, with only England seemingly attempting to move to the principle of “private ﬁrst”. This conclusion is fortiﬁed by the fact that Poland and Hungary, and rather surprisingly South Korea, have used a decline in the number of students in order to increase their public funding per student. What the data do not include are the more recent effects of the ﬁnancial crisis from 2008 to 2009, which has taken some time to impact on public spending in certain countries. A case in point is Portugal, where recent ﬁgures suggest that
Fig. 2 Per-student income by source in English HEIs (1995–2011, constant prices). Source Orr et al. (2014a, p. 48)
public spending per student has been declining (Cerdeira et al. 2014). As with other cases visible in the observation of the 15 year period of investigation, however, this may not be leading to a system change, but instead a temporary situation in the context of the public funding crisis. Only time can tell.
In general, responsiveness as a result of cost-sharing is less marked in traditional universities and more clearly visible in new institutions.
This was not a simple area to investigate and the conclusions here are based on interviews and proxy measures for responsiveness. The term 'responsiveness' used in Hypothesis B subsumes any kind of behaviour that can be understood as a (re) action to satisfy actual or anticipated user demand or to actively produce such demand. Several aspects of such behaviour were investigated in this study: the mix of disciplines institutions offer, diversity of provision, diversity in the modes of study, the focus on certain, ﬁnancially attractive user groups, outreach activities and efforts to increase quality and relevance of instruction.
It turns out that the expectation that HEIs will become more responsive is based on a naïve business-based concept of the university. The study ﬁnds little evidence for HEIs “chasing the money” for a number of reasons. Firstly, in many cases, the incentive for an HEI to do this is low. This is because fees often only cover a fraction of the total costs of a study place, with the rest coming from the public purse, which has increasingly been using performance-based indicators and target agreements to steer HEIs from a distance (Orr and Jaeger 2009). Secondly, and in connection with new governance constellations in higher education, the autonomy of HEIs is often restricted, so that quick reactions to new demands in the market are limited (Eastermann et al. 2011). Thirdly, there are other incentives, particularly concerning research activities, which may be stronger and may therefore gain more attention on the part of the universities (OECD 2014; Wespel et al. 2013). Finally, universities are perhaps better understood as organisations framed by a college culture, in which prestige and excellence in certain disciplinary ﬁelds is valued more than reactions to external stimuli (Bergquist 1992).
What the study did ﬁnd, in contrast, was that a number of case-study countries had been introducing new forms of HEI in order to have a more responsive higher education sector. A wave of newly established private institutions (e.g. in South Korea and Poland) and/or of an alternative type of public or private institution with an inherent vocational orientation was the result (e.g. 80 % of student growth in Finland and 66 % of growth in Austria was in the polytechnic/Fachhochschule sectors).—To some extent, such developments also take the pressure for change off the existing university sector, including change towards more responsiveness.
Demand for higher education has been increasing everywhere throughout the last two decades to such a degree that adverse effects of increased cost-sharing on participation are difﬁcult to establish.
Both Hypotheses C and D expect that a change to the cost of studying would work as a mechanism to change students' behaviour regarding their enrolment and their modus of studying. In the case of Hypothesis C, a downturn in the number of
Fig. 3 Total enrollments in higher education (1995 = 100). Source Orr et al. (2014a, p. 79)
people enrolling for studies was expected. In the period investigated in this study, enrolment grew in all case study countries through to the mid-2000s, with declines or slowing of growth toward the end of 2000s—see Fig. 3. The case of Austria showed a dip in student numbers at the time of the introduction of the fees, but—as explained in the study—this is mostly related to the fees changing the incentive for non-students to enrol as student for such non-study beneﬁts as cheaper medical insurance, cheaper urban travel etc. National studies showed only a small decline on the part of active-students related to the introduction of fees (Pechar and Wroblewski 2002) and Fig. 3 shows recovery and further growth in the number of students over time.
This pattern and further analyses in the study lead to four possible conclusions related to the effects of fees. The ﬁrst is that the expected mechanism, that changes to students' liquidity or their evaluation of the returns on investment of studying would lead to a change in their enrolment behaviour, may occur, but not speciﬁcally because of fees alone. Fees are only a small part of student costs, in many cases, and looking at changes in the total cost structure for students over time provides a much more stable picture than one would expect if only looking at fees—see Fig. 4. Whilst the impact of the fees is clearly visible for England, it is non-apparent for Germany or Austria, where, inter alia, the drop in costs of clothing has had the largest impact on students' annual costs. Conversely, the rise in student costs for Finland, which does not raise fees, becomes visible.
The second possible explanation is also about putting tuition fees costs into a greater ﬁnancial context. In many cases, study aid is provided to all students or targeted student groups in order to compensate for the fee costs. This led to the European Commission to deﬁne the major recommendation of the study as coupling study costs and study aid in a sensible manner (European Commission 2014). The study looked at the “out-of-pocket fees” of students by combining average fees and average support in the form of non-repayable and repayable study aid (grants
Fig. 4 Total annual costs to students in Euros including fees (constant prices 2011) Note In many cases the data are from national surveys, which are not carried out in the same year in every country. For this reason, the years have been banded. No multi-year data for Poland or Hungary. Source Orr et al. (2014a, p. 76)
and loans, respectively). The analysis showed that the “out-of-pocket fees” tend to remain under zero, which is not surprising under the assumption that such study aid is also meant to cover some part of students living costs. Only in South Korea do the costs remain above zero at around two thousand Euros per annum (constant prices). This stability is, in fact, the result of a policy whereby the annual increase in
Fig. 5 Tuition fees and out-of-pocket fees in South Korean higher education (in won, constant prices 2011). Note Net fees = fees minus grants, out-of-pocket fees = net fees minus loans. Source Orr et al. (2014b, p. 424)
fees is being compensated for through increasingly providing grants to students. This is the case in both private and public sectors—see Fig. 5 for a view of the public higher education sector.
The third possible explanation is that the mechanism of a change in ﬁnancial costs is not strong enough to really have an impact. This could especially be the case in countries such as England, where there is a blanket cost of attending university or college and very little differentiation in the fee structure at Bachelor level (the focus of this study). This means that prospective students are presented with the binary choice of studying and paying the high fees (albeit deferred until they earn a regular wage on the labour market) or not studying at all. Indeed, two developments in the English context are particularly interesting. Firstly, that few student groups appear to have changed their enrolment patterns after the introduction of higher fees in 2012 (but all three previous explanations are also important in order to understand the English case) (UCAS 2012). Secondly, that HEIs have changed their support structures for new students over time. Whilst these largely provided certain groups of students (including students from underrepresented groups) with direct grants to offset the costs of their fees in the beginning, they are now using around 12 % of funding income through fees to fund speciﬁc (non-ﬁnancial) support initiatives for these groups (OFFA 2013). This is also in accordance with a recent national study in the United Kingdom looking at effective means to support widening participation, which sees costs as only one of the issues (Higher Education Academy 2012).
The fourth possible explanation is that there are effects, but that these only impact on small groups of students—and big effects on small groups look like small effects, even if you can see them. In the review of studies looking at students' socio-economic characteristics, no common patterns were really evident. However, it was also not possible to conclude that fee policy has a direct impact on the participation on underrepresented groups. In fact, in a number of countries (including Poland and England, which had clear data to show this) participation of underrepresented groups has been increasing. However, it should not be forgotten that these changes are happening within a higher education system which has been both expanding and diversifying. We know, for instance, that the non-university and the private sectors are more inclusive than the university sector, so if these sectors are growing, it means that higher education is offering more places, which are attractive or “acceptable” for new student populations. More subtle research, which was outside the remit of this study, is necessary to unpack such (new) effects of both vertical and horizontal differentiation by social background within the higher education system.
In a possible continuum between empirical research and policy advice, the study presented here tends towards the latter. This has made it a very useful vehicle for stimulating new debates on cost-sharing and tuition fee policy in Europe and abroad (e.g. in Australia during the current reforms there). One of the central recommendations of the study was that policy-makers and disputants consider both the questions of sustainable funding of higher education provision, and equitable access and success for students together, since it can be observed that this is seldom the case. In Germany, which abolished all tuition fees in all Länder by 2014, the study was featured in a big article in Spiegel Online, but was not commented upon further. However, recently, the German Rectors' Conference has referred both to this study and a special German report on the development of public spending on teaching in higher education per student (Dohmen and Krempkow 2014) to call for a renewed discussion on tuition fees and their possible place in higher education funding. It is this type of triangulation of the results and re-connecting the ﬁndings to national contexts that should be the ultimate goal of comparative research. In this way, it can feed into national policy debates and decision-making processes. It is also hoped that the study will stimulate new research, which goes beyond a frequently encountered strong ﬁxation on tuition fees as an isolated cost and an independent variable to view higher education funding in its larger real-life context.
Acknowledgments This paper draws heavily on the work executed jointly by Orr et al. (2014a, b), and the author would like to thank his counterparts for their work on the full report.