Financing Higher Education: A Global Crisis

Perhaps the most critical change needed is the acceptance by tertiary education institutions of the necessity to achieve their goals of instruction, research and public service through mobilizing a larger proportion of their own resources and using the existing resources more efficiently.

Allocating sufficient funds for education has always been a difficult undertaking, even in times of abundant financial resources.  It is much more difficult in recessionary times when both private and public budgets are under severe pressure and spending cuts have to be implemented in order to control and reduce fiscal deficits.

Some would argue that if budget cuts for education have to be made, then primary education should be given priority over tertiary education because a high percentage of tertiary educated workers migrate soon after graduation. Accordingly, investment in primary education has a higher return than investment in tertiary education, once migration opportunities are considered. Further, the private benefit of a publicly funded tax payer education provides a greater personal reward to the individual than the society; therefore, providing resources for education must be carefully targeted and financed to avoid resource misallocations. 
Notwithstanding these concerns, it has been acknowledged that higher education is an indispensable component of national and personal development. This has triggered a global debate on financing higher education in developed, transitional and developing economies, including Jamaica. Generally, the debate has focused on the declining capacity of the state to fund higher education when there is a simultaneous and escalating demand for education services aimed at expanding the knowledge base of the work force and the society.

This essay addresses some of the issues that have affected the declining financial allocations for education at a time of increasing costs. It explores some policy options for financing higher education in Jamaica, given that government financing is not likely to be at the same level as in the past.

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