REFORMS OF HIGHER EDUCATION FUNDING IN OECD COUNTRIES: ANALYSIS OF MECHANISMS AND CLASSIFICATION OF APPROACHES

Abstract

This article reviews approaches to reforming higher education financing systems in OECD countries in the context of expanding access to higher education and increasing fiscal constraints. In line with the research objective, the study examines the core features of key reforms, taking into account changes in the relationships between the state, higher education institutions, and students, and develops a classification of the relevant financing mechanisms. The analysis draws on analytical materials published by the OECD and the European Commission. The main drivers of reform are identified, including budgetary pressures, growing student enrolment, increasing demands for transparency and efficiency in public spending, the rising importance of research and innovation, and the need to expand university autonomy. At the level of state–student relations, reforms have been implemented through cost-sharing mechanisms, including direct measures (the introduction or increase of tuition fees and deferred payment schemes) and indirect measures (reductions in grants, the replacement of grants with student loans, limitations on publicly funded study places, and the transfer of ancillary study-related costs to students). These reforms have aimed to reduce the role of the state in financing higher education and to shift part of the financial responsibility for education to students. At the level of state–higher education institution relations, a shift from line-item budgeting towards governance through funding instruments has taken place, including the expansion of formula-based funding, block grants, performancebased funding, contractual arrangements, and competitive project funding. While these mechanisms have enhanced transparency and efficiency in the allocation of public resources, they have also become tools for strengthening strategic steering over the development of higher education and research. A classification of higher education financing reforms based on the actors involved and the mechanisms of implementation is proposed.