Indicator C5. How much do tertiary students pay and what public support do they receive?

Entry into tertiary education often means costs for students and their families, both in terms of tuition fees, foregone earnings and living expenses, although they may also receive financial support to help them afford it. Most national students entering tertiary programmes enrol at bachelor’s or equivalent level in OECD countries (see Indicator B4). Public institutions do not charge tuition fees to national students at this level in nearly one-third of countries with data, including Denmark, Estonia (for programmes taught in Estonian), Finland, Norway, the Slovak Republic, Sweden and Turkey (Figure C5.1). In a similar number of countries, tuition fees are moderate, with the average cost for students under USD 3 000. In the remaining countries and economies, tuition fees range from about USD 3 800 to over USD 8 000 per year. They exceed USD 12 000 in England (United Kingdom), where there are no public institutions at tertiary level and all students enrol in government-dependent private institutions (Figure C5.1).

In many OECD countries, short-cycle tertiary programmes are expanding, as they provide a shorter and cheaper tertiary programme and, in a number of countries, a better benefit-to-cost ratio than long-cycle tertiary programmes such as bachelor’s and master’s programmes (OECD, 2019[1]). Tuition fees for short-cycle tertiary programmes in public institutions are generally lower than for bachelor’s programmes. Generally, they are free of charge in Denmark, France, Spain, Sweden and Turkey and amount to less than half the tuition fees for bachelor’s programmes in Chile and the United States, where they cost less than USD 3 800 per year. In contrast, tuition fees for short-cycle tertiary programmes in public institutions are the same as for bachelor’s programmes in the Flemish Community of Belgium and the Netherlands. In Norway, short-cycle tertiary is the only tertiary programme that charges fees, although only 22% of public institutions do so (Figure C5.1).

Higher tertiary education after a bachelor’s degree leads to better labour-market outcomes. Graduates with a master’s or doctoral or equivalent degree have better employment opportunities and earnings prospects (see Indicator A4). However, despite the earnings advantage from completing a master’s or doctoral programme, tuition fees in public institutions for full-time national students in these programmes are similar to those for bachelor’s programmes in the majority of OECD countries. The additional expenses that master’s and doctoral students face are limited to the additional years of education and the foregone earnings due to the delayed entry into the labour market. In most countries where tuition is free of charge at bachelor’s level, there are also no fees at master’s or doctoral levels. In other countries and economies, similar tuition fees are charged on average for bachelor’s and master’s programmes, as in Austria, the Flemish Community of Belgium, Italy, Japan, Latvia (government-dependent private institutions) and the Netherlands (Table C5.1).

In contrast, tuition fees for master’s programmes in public institutions are between 25% and 50% higher than for bachelor’s programmes in Chile, France, Israel, Korea, New Zealand, Spain and the United States, while in the French Community of Belgium, Hungary and Lithuania, they are over 95% higher (Table C5.1). These higher fees may limit participation at this level if they are not paired with financial support to students. In a few countries (e.g. Australia, the Flemish Community of Belgium and Italy), public institutions charge lower fees for doctoral programmes than for bachelor’s and master’s programmes to promote enrolment in doctoral programmes and attract talent for research and innovation. In Australia, for example, the average annual tuition fees in public institutions for doctoral programmes are about 15 times lower than for bachelor’s programmes (about USD 200 compared to USD 5 000). In fact, very few national doctoral students are charged any fees in Australia (less than 5% of doctoral students in public institutions). However, public institutions in Canada, Chile, France, Ireland, Korea, Latvia (government-dependent private institutions) and the United States charge higher tuition fees for doctoral programmes than for bachelor’s programmes (data for the United States refer to master’s and doctoral programmes combined). Lithuania is the only country where annual tuition for a doctoral programme is more than three times the tuition for a bachelor’s programme (Table C5.1).

Some institutions may struggle to strike a balance between offering an affordable education and their need for financial resources, leading to different levels of tuition fees in different types of institutions (see Definitions section). Independent private institutions are often less affected by government regulation and less reliant on public funds than public institutions. In some cases, they are also more pressed by competition to provide the best possible services to students. As a result, they charge higher annual tuition fees than public institutions for bachelor’s programmes in all OECD countries with available data (Table C5.1).

In most OECD countries and economies with available data, less than 20% of all tertiary students enrol in independent private institutions. In only about one-fifth of OECD countries and economies are the majority of students enrolled in private institutions. In England (United Kingdom) and Latvia, the great majority of students are enrolled in government-dependent private institutions (Table C5.1).

In over one-third of countries with available data, tuition fees for bachelor’s or equivalent programmes are at least twice as high in private institutions as in public ones. Tuition fees are over five times higher in private institutions than in public institutions in Spain; more than three times higher in Israel,Italy and the United States; and less than twice as high in Australia, Hungary, Japan,Korea and Latvia. In Estonia and Norway, no tuition fees are charged by public institutions for bachelor’s degrees (in Estonia only for programmes taught in Estonian), while fees reach over USD 5 700 in private institutions. In contrast, indipendent private institutions in Chile,Lithuania and New Zealand charge slightly lower fees than public institutions at bachelor’s level (Table C5.1).

Tuition fees vary not only across countries and educational levels, but also within countries for a given level of education. For instance, in Canada, where annual average tuition fees for national students in public institutions are around USD 5 100, they range from 40% of this amount to over four times more, depending on the field of study (nearly USD 20 800). Among countries with high average tuition fees, the maximum fee charged is more than three times the average amount in Lithuania and twice the amount in New Zealand while in Australia, Chile, Ireland, Korea and the United States, the maximum fee charged is 20-45% higher than the average tuition fees for national students enrolled in bachelor’s programmes (Figure C5.2).

The range of tuition fees is also wide in a few countries with more moderate fees, such as the Netherlands (annual average fees of USD 2 700), Italy (annual average fees of USD 2 000) and Spain (annual average fees of USD 1 800). Tuition fees can exceed USD 3 700 in Italy and Spain and USD 13 000 in the Netherlands, although in these countries, high tuition fees only apply for a small number of students. In contrast, the range is relatively small in the Flemish and French Communities of Belgium, Israel, and in countries where public institiutions do not charge any tuition fees (Figure C5.2).

Minimum fees in countries with high tuition fees can be as low as 8% the average amount in Lithuania and 14% in New Zealand; between 40% and 60% the average amount in Australia Canada and Korea; and between 70% and 85% in Chile, Ireland and the United States. Among the other countries and economies, minimum tuition fees are about half the average amount in the Netherlands and Spain and 15% or less the average amount in Flemish and French Communities of Belgium and Italy (Figure C5.2). There are several reasons why tuition fees vary within countries, including institutions’ autonomy to set their fees (either fully or within some limits) or the fact that some programmes are cheaper to provide than others (e.g. law degrees are cheaper to provide than medical degrees).

Another reason tuition fees vary within countries and those paid by students differ from what institutions charge are tuition fee waivers. While the tuition fee charged by an institution does not change per se, the fees paid by students who receive a tuition waiver are lower as the fee waiver is deducted. While a scholarship is a type of direct financial support to students that does not need to be be paid back, a tuition waiver is often granted by an educational institution and indirectly financed by the public sector to the tertiary institution. The waiver will eliminate the cost of tuition for a designated number of credit hours, but it cannot be used for any other educational expense. In a number of countries (e.g. Belgium and Italy), it is possible, especially for students from low-income backgrounds, to receive both a scholarship and a tuition waiver.

This type of indirect subsidy to tertiary education exists Austria, Chile, the Flemish and French Communities of Belgium, Ireland, and New Zealand. In Ireland, tuition fees charged by public institutions for bachelor’s programmes may exceed USD 8 300, but the majority of first-cycle tertiary students benefit from the Free Fees Scheme and pay only an annual student contribution charge of USD 3 700 towards the cost of their programme of study (for academic year 2019/20). In New Zealand, first-time tertiary students do not pay any tuition fees in their first year of studies, as tuition waivers fully cover the fees (Figure C5.2).

Tuition fee policies generally cover all students studying in the country’s educational institutions, including foreign students (see Definitions section). However, many countries allow institutions to charge different tuition fees for particular programmes or student groups, including foreign students, in an effort to strike a balance between public and private sources for tertiary funding. As a result, in a number of countries tuition fees are higher for foreign students which contribute significantly to the funding of tertiary educational institutions. However, higher fees for foreign students can also impact international student flows (see Indicator B6), among other factors (OECD, 2017[2]).

Public institutions charge national and foreign students enrolled in bachelor’s programmes similar tuition fees in Chile, Estonia (provided the curriculum is in English), Italy, Japan, Korea and Spain, while no tuition fees are applied to either national or foreign students in Norway (Table C5.1). In addition, within the EU and the EEA, countries charge the same tuition fees to nationals and students from other EU and EEA countries.

However, an increasing number of OECD countries charge higher tuition fees to foreign students than to national ones and, in some countries, this difference can be significant. For instance, in Australia, Canada, Ireland, New Zealand and the United States, public institutions charge foreign students (non-EU/EEA in the case of Ireland) on average over USD 14 500 more per year than national students at the bachelor’s level (Table C5.1). In the United States, the higher tuition applies also to national students who study outside their own state. In Finland and Sweden, students from outside the EU/EEA area are charged about USD 13 000 per year for bachelor’s programmes in public institutions, while no tuition fees are applied to national (or EU/EEA) students. In France and Latvia, public institutions (government-dependent private institutions for Latvia) charge non-EU/EEA students between USD 3 500 and USD 4 500 more than national students, while this difference is less than USD 1 000 in Austria and Hungary (Table C5.1).

Higher tuition fees do not necessarily discourage foreign students from studying abroad. Tertiary education in countries with higher fees for foreign students can still be attractive because of the quality and prestige of their educational institutions or the expected labour-market opportunities in the country after graduation. For instance, in Australia, Canada and New Zealand, international students make up at least 13% of students enrolled at the bachelor’s level, compared to only 5% on average across OECD countries (see Indicator B6).

In about a third of the countries and economies with available data, tuition fees for bachelor’s degrees charged by public institutions for national students have increased by at least 20% over the past decade, in real terms. This is the case for England (United Kingdom, government-dependent private institutions), the Flemish Community of Belgium, Italy, New Zealand and Spain. The largest increase has been in England (United Kingdom), where tuition fees have tripled since 2009/10. In contrast, tuition fees for bachelor’s programmes in public institutions decreased over this period in Austria, the French Community of Belgium, France, Germany, Ireland, Korea and Latvia (government-dependent private institutions). There has not been any change over this period among the countries that do not charge any tuition fees (Denmark, Estonia, Finland, Norway and Sweden). In Australia and Canada, tuition fees have remained fairly stable and have not increased by more than 10%, while in Chile, the Netherlands and the United States they were 14-16% higher in 2019/20 than in 2009/10 (Table C5.2).

Broadening equal access to higher education has been an objective public policy for decades, but the policy tools used to achieve higher tertiary attainment are quite heterogeneous. Across different countries and economies, higher education attainment can be observed both in the presence of high and low levels of fees (Cattaneo et al., 2020[3]).

OECD countries have different approaches to providing financial support to students enrolled in tertiary education. Regardless of the level of tuition fees, countries and economies can be categorised according to the level of public financial support available to tertiary students. In Australia, Denmark, England (United Kingdom), New Zealand, Sweden and the United States, at least 80% of national students receive public financial support in the form of student loans, scholarships or grants, while this share is between 55% and 61% in Chile, Finland and Lithuania. Among other European countries, between 34% and 44% of students receive public financial support in France, Italy and Spain, while no more than 25% of students do so in Austria, the Flemish and French Communities of Belgium, Germany, and Switzerland (Figure C5.3). In these countries, public financial support instead targets selected groups of students, such as those from disadvantaged backgrounds or low-income families.

Three groups of countries are therefore identified: countries with low or no tuition fees and high financial support to students (Denmark, Finland and Sweden); countries with high tuition fees and high financial support to students (Australia, Chile, England [United Kingdom], Lithuania, New Zealand and the United States); and countries with moderate tuition fees and financial support to students targeted to less than 50% of tertiary students (Austria, the Flemish and French Communities of Belgium, France, Germany, Italy, and Spain) (Figure C5.3).

In the last decade, the share of students receiving public financial support in tertiary education has increased by at least 10 percentage points in Chile, Denmark, England (United Kingdom), Italy, Spain and Sweden: the strongest increase in the share of students receiving public financial support can be observed in Sweden (by 24 percentage points) and Chile (by 22 percentage points). This share has remained stable in all other OECD countries and economies with available data, with variations reaching at most ±7 percentage points. The largest decrease in the share of students receiving financial support in tertiary education was observed in New Zealand (Table C5.2).

The type of financial support to tertiary students, whether in the form of loans, grants or scholarships, is a key question faced by many educational systems. On the one hand, advocates of student loans argue that they allow a larger number of students to benefit from the available resources (OECD, 2014[4]). If funding spent on scholarships and grants was used to guarantee and subsidise loans, the same public resources could support a larger number of students, and overall access to higher education would increase. Loans also shift some of the cost of higher education to those who benefit from it the most, individual students, reflecting the high private returns of completing tertiary education (see Indicator A5).

On the other hand, student loans are less effective than grants at encouraging low-income students to access tertiary education. Opponents of loans argue that high levels of student debt at graduation may have adverse effects for both students and governments if large numbers of students are unable to repay their loans (OECD, 2014[4]). A large share of indebted graduates could be a problem if their employment prospects are not sufficient enough to guarantee student loan repayments.

OECD governments support students’ living and education costs through different combinations of these two types of support – and these combinations vary even among countries with similar levels of tuition fees. Among countries with data available, the average amount of public or government-guaranteed private loans that students borrow each year ranges from USD 2 900 per student in Latvia to over USD 12 000 in England (United Kingdom) and Norway (where tuition is free of charge and loans finance students’ living costs). Scholarships or grants received by students range from USD 1 500 per year in the French Community of Belgium to over USD 7 000 in Australia, Austria, Denmark, Italy, New Zealand and Switzerland (Table C5.2).

In addition to direct financial support to students in the form of public loans, guarantees on students’ private loans, grants and scholarships, countries may also provide indirect subsidies to tertiary education by fully or partially waiving tuition fees charged by educational institutions (see section on Variation of tuition fees within countries).The average tuition waivers range from USD 1 100 or less in Austria and the Flemish and French Communities of Belgium to nearly USD 7 800 in Chile at bachelor’s level in public institutions. Tuition waivers are just below USD 4 600 in Ireland for beneficiaries of the Free Fees Scheme and in New Zealand for first-time tertiary students in their first year of study. The share of students in bachelor’s programmes receiving a fee waiver reaches 22-25% in the French Community of Belgium and New Zealand; 39-53% in France, Italy and Spain; and 64% in Chile (Table C5.2).

Reforms related to the level of tuition fees and the availability of scholarships, grants and loans are intensely debated in national education policy. They are often discussed in tandem, as countries seek to improve or adjust how the public and private sectors (including students and their families) share the costs of tertiary education. In recent years, OECD countries and economies have passed several reforms to improve access to tertiary education: among countries with available data, 11 countries and economies have implemented reforms on the level of tuition fees. Nine of these combined the reforms with a change in the level of public subsidies available to students (Table C5.3).

In Chile, Korea and Portugal, measures were implemented to expand access to tertiary education to students from disadvantaged backgrounds, while New Zealand increased public subsidies to make the first year of tertiary education free of tuition fees for new students or trainees. From the academic year 2016/17, Norway started a reform to gradually increase the State Educational Loan Fund’s financial support from 10 to 11 months per year. In England (United Kingdom), the threshold for the repayment of income-contingent loans for graduates from short-cycle tertiary and bachelor’s programmes was increased in financial year 2018/19 on, and grants for living costs were replaced with larger loans for new eligible national students in academic year 2016/17 on. In Australia, measures were taken to improve the sustainability of the subsidy system for public institutions’ students enrolled in bachelor’s programmes (Table C5.3).

In addition, the COVID-19 health crisis had a strong impact on tertiary education and countries took several policy measures to cope with unprecedented situations. All OECD countries with available data implemented some policy tools, from a more flexible student loan repayment schedule and the introduction of financial aid packages to the adaptation of tuition fee policies and support to international students (see Box C5.1).

In this chapter, national students are defined as the citizens of a country who are studying within that country. Foreign students are those who are not citizens of the country in which the data are collected. While pragmatic and operational, this classification is inappropriate for capturing student mobility because of differing national policies regarding the naturalisation of immigrants. For EU countries, citizens from other EU countries usually pay the same fees as national students. In these cases, foreign students refer to students who are citizens of countries outside the EU. Further details on these definitions are available in Indicator B6.

Private institutions are those controlled and managed by a non-governmental organisation (e.g. a church, a trade union or business enterprise, foreign or international agency), or whose governing board consists mostly of members not selected by a public agency. Private institutions are considered government-dependent if they receive more than 50% of their core funding from government agencies or if their teaching personnel are paid by a government agency. Independent private institutions receive less than 50% of their core funding from government agencies and their teaching personnel are not paid by a government agency.

Tuition fee amounts refer to gross tuition fees charged by institutions, before grants, scholarships and tuition waivers are applied.

Tuition fees and loan amounts in national currencies are converted into equivalent USD by dividing the national currency by the purchasing power parity (PPP) index for gross domestic product. The amounts of tuition fees and associated proportions of students should be interpreted with caution, as they represent the weighted averages of the main tertiary programmes and may not cover all educational institutions.

Student loans include the full range of student loans extended or guaranteed by governments, in order to provide information on the level of support received by students. The gross amount of loans provides an appropriate measure of the financial aid to current participants in education. Interest payments and repayments of principal by borrowers should be taken into account when assessing the net cost of student loans to public and private lenders. In most countries, loan repayments do not flow to education authorities, and the money is not available to them to cover other expenditure on education.

OECD indicators take the full amount of scholarships/grants and loans (gross) into account when discussing financial aid to current students. Some OECD countries have difficulty quantifying the amount of loans to students. Therefore, data on student loans should also be treated with caution.

For more information, please see the OECD Handbook for Internationally Comparative Education Statistics (OECD, 2018[6]) and Annex 3 for country-specific notes (https://www.oecd.org/education/education-at-a-glance/EAG2021_Annex3_ChapterC.pdf).

Data refer to the academic year 2019/20 and are based on a special survey administered by the OECD in 2021 (for details, see Annex 3 at: https://www.oecd.org/education/education-at-a-glance/EAG2021_Annex3_ChapterC.pdf).

References

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[7] Demange, G., R. Fenge and S. Uebelmesser (2020), “Competition in the quality of higher education: The impact of student mobility”, International Tax and Public Finance, Vol. 27/5, pp. 1224-1263, http://dx.doi.org/10.1007/s10797-020-09595-5.

[1] OECD (2019), Education at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/f8d7880d-en.

[6] OECD (2018), Handbook for Internationally Comparative Education Statistics: Concepts, Standards, Definitions and Classifications, OECD Publishing, Paris, https://doi.org/10.1787/9789264304444-en.

[2] OECD (2017), Education at a Glance 2017: OECD Indicators, OECD Publishing, Paris, https://dx.doi.org/10.1787/eag-2017-en.

[8] OECD (2017), “Tuition fee reforms and international mobility”, Education Indicators in Focus, No. 51, OECD Publishing, Paris, https://dx.doi.org/10.1787/2dbe470a-en.

[4] OECD (2014), Education at a Glance 2014: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2014-en.

[5] World Bank (2020), The COVID-19 Crisis Response: Supporting Tertiary Education for Continuity, Adaptation, and Innovation, The World Bank, Washington, DC, https://openknowledge.worldbank.org/handle/10986/34571 (accessed on 4 June 2021).

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