Government Models for Financing Higher Education in a Global Context: Lessons from the US and UK

This paper reviews common funding approaches/models found in the US and UK as well as the philosophical, political, and economic rationales underpinning their use, and the policy environments that contributed to their adoption in the hope of informing substantive policy discussion, decision-making, and implementation. It finds that different funding approaches/models may be appropriate based on the contextual realities and current circumstances of a country. Thus, incremental approaches might reflect government interests, but may not serve the public good. Enrollment based approaches (per capita and per credit) have advantages and remain viable options for adoption for nations seeking to expand access to higher education. Performance funding options may be appropriate when a robust system of higher education exists, and government seeks performance outcomes as a tool in promoting special projects or government priorities. However, those nations considering performance-based models may need a fair warning. The performance-based approach has yet to be proven to be the panacea it was purported to be, at least in the US and UK.