International Journal of Educational Development 58 (2018) 1–4

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International Journal of Educational Development

journal homepage: www.elsevier.com/locate/ijedudev

IJED Special Issue Editorial: Global Trends in Higher Education Financing T

Global trends in higher education financing are in many ways unsustainable under traditional models of higher education financing and delivery.
The cost of higher education continues to escalate at an alarming rate in the United States and globally. Public funding sources from around the
world are increasingly under pressure to reduce allocations towards higher education while at the same time maintaining quality and raising
outcome expectations.
This unsustainable trend was one of the central themes of Christensen and Eyring (2011) in their book The Innovative University where they
introduced the concept of disruptive innovation as a necessary requirement to meet the inevitable changes in U.S. higher education financing and
delivery of courses. Christensen later argued that innovations and improvements in online delivery will continue to become a more cost-effective way
for students to receive their higher education training, rendering traditional higher education finance and delivery models obsolete and un-
competitive within a very short time period (e.g., 10-15 years). This will lead to increased closures, mergers, and investments in healthier, more
robust higher education financing and delivery models (see Christensen, 2017; Hess, 2017; Lederman, 2017; Warner, 2017).
Unfortunately, this financial outlook is projected to continue well into the future, and in many instances it is deemed unsustainable in the long
run (Sutin and Jacob, 2016). Within this context, the Global Trends in Higher Education Financing Special Issue was conceptualized to examine good
and best practices of higher education finance and delivery models in international settings. Therefore, a primary objective of the special issue was to
examine exemplary models that can reduce or at least help level off this unsustainable financial trend. Very little in the higher education literature
exists on this issue, especially when it comes to comparative studies between countries and regions. Higher educational systems and institutions are
increasingly under pressure to develop solutions that foster sustained institutional financial self-reliance, render degrees more affordable, and
enhance employability of graduates.
Succinctly stated, the traditional financial model of higher education in the United States is revenue-driven. Its fragility is demonstrative as
tuition and fees increases exceed inflation, with additional financial burdens falling upon students. In this model, primary sources of revenues
include: (1) public funding for institutions receiving subsidies from national, state and/or local governments; (2) enrollment-driven student tuition
and fees; (3) fees charged for room and board; and (4) allocations from unrestricted endowments. The conundrum facing much of U.S. post-
secondary education is that this model is unsustainable for many institutions and students alike.
A glance at underlying causes of this failing financial model is revealing. Government funding is uncertain and often a lower component of costs
to educate full- and part-time students. In some cases, such as many non-flagship public universities and less-than-elite private colleges and uni-
versities, enrollment is declining. Non-discretionary operating expenses such as health care benefits, in countries lacking national health systems,
repairs and maintenance of aging facilities, campus and cybersecurity, regulatory and legal compliance, and technology acquisition consume in-
creasing parts of annual budgets.
A probing analysis reveals raises questions worthy of consideration. Does the prevailing leadership development model in higher education yield
persons with requisite strategic, tactical and behavioral skills? Are prevailing organizational structures effective, and do they add value to quality of
learning and student support? Are there more efficient ways to reduce incremental expenses born by post-secondary institutions as they seek to
remediate the skill and knowledge gaps of entering students who are unprepared for college? Are higher education curricula focused, relevant, and
student-centric? Should comprehensive medium term financial plans guide annual budgets? Which operating expenses can be reduced through
delegation of decision-making, process re-engineering, and cost-efficient uses of technology? Is resistance to change an intrinsic component of the
institutional culture?
Complex problems, such as the faltering financial model of U.S. higher education, require comprehensive evidence-based plans, collaborative
development of solutions by internal and external stakeholders alike, and policies and practices that render the development of human capital the
centerpiece of educational environments. Some guiding principles applicable to institutional re-design include: (1) creating sustainable financial
models aligned with the institutional mission, vision, and quality of education; (2) daring to ask hard questions; (3) allowing no protective shields for
“sacred cows”; and (4) deploying creative approaches to knowledge acquisition and improving student support services by building upon what
demonstrably works and modifying or eliminating those proven ineffectual. Finally, in an era of visual learning and widespread use of social media,
create space for faculty and support services to innovate and optimize uses of emergent technology as tools to enhance learning outcomes and
behavioral skills of students.
This special issue includes contributions from content area experts on innovative higher education learning delivery and financial models from
across the globe. Country and regional case studies examine what has worked well by select higher education institutions and higher education
systems within Southeast Asia and Oceania; China, Hong Kong, and Taiwan; Germany; India; Israel; Japan; Korea; Latin America; the United

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Kingdom; and the United States. Each contributor to addressed some or all of the following themes in their respective papers.
Examine prominent delivery models of higher education in the respective countries/regions from the perspective of their socioeconomic, de-
mographic, political, and workforce competitiveness contexts, with special attention to education effectiveness and policy;

1. Examine public education funding models from the vantage point of access, affordability, and desirable outcomes from higher education;
2. Comment upon elements of business, education, and funding models that appear to work, and others with room for improvement;
3. Assess exemplars of business and higher education models, and comment upon their potential portability; and
4. Articulate the case for reform and choices available to policy makers and educational leaders.
5. Additionally, each paper includes a brief section that addresses lessons that can lead to a more equitable system of higher education via better
outcomes among underserved and low-income populations.

The first two papers set the stage for the special issue. An introductory paper by W. James Jacob and Veysel Gokbel titled “Global Higher
Education Learning Outcomes and Financial Trends” highlights many current trends and a few delivery models that have particular relevance in
comparative and international contexts. Seven financial trends at the heart of many global higher education shifts are identified: enrollment patterns,
competition, government funding, public support, curriculum revisions, increased personal and institutional debt, and inequalities among many
higher education stakeholder groups. The authors then examine seven case study HEIs that provide optimal delivery models to help overcome many
of the financial challenges outlined in this special issue, including Aalto University, Finland; École Polytechnique Fédérale de Lausanne, Switzerland;
Brigham Young University–Pathway Worldwide, USA; and Western Governors University, USA.
In the second introductory article—“Reforming Higher Education from Within: Lessons Learned from Other Mature Sectors of the
Economy”—Stewart E. Sutin identifies characteristics of transformative organizations that adapt to changing and challenging environments. In doing
so, the article’s core thesis is that solutions for failing business models of many higher education institutions can be found from within. The case for
reform is provided, along with a discussion of critical success factors requisite to overcoming impediments to change. Exemplars of adaptive
organizations, both within higher education and in the private industry, are given. Special attention is given to companies in mature industries,
which bare certain similarities to higher education. After making the case for reforming the business model in much of higher education, attention is
given to why certain organizations succeed, others fail, and lessons learned from each. The article concludes with a summation of traits shared by
transformative organizations that managed to change from within.
The special issue includes two articles from Europe. Both articles detail a contemporary historical evolution of higher education financing in
Germany and the UK. Going against the global trend where public financial support toward higher education continues to slide, Ulrich Teichler notes
how Germany has provided greater public funding and support since the 1990s. This ongoing local and federal government financial support has
diversified over the past 20 years, but has been able to keep pace with enrollment increases and the demands of a knowledge-based society. Teichler
identifies eight major issues related to higher education financing in Germany, which examine areas of local and national politics, funding sources,
incentives-based funding, adaptability, public support, internationalization, and quality assurance.
In “Global Trends in Higher Education Financing: The United Kingdom,” Simon Margison details historical funding shifts in the UK over a 40-year
period. While the UK higher education system has shifted from relying entirely on government financial support to a combination of public/private
funding, HEIs continue to rely on the government for research, teaching, and student loan support. Margison notes how HEIs are dependent on
funding based on objectives-oriented assessments and institutional performance. This system tends to benefit the 24 research-intensive Russel Group
universities over other HEIs.
Three articles in the special issue examine geographic regions—Southeast Asia and Oceania; China, Hong Kong, and Taiwan; and Latin America.
In “Financing trends in Southeast Asia and Oceania: Meeting the demands of regional higher education growth,” W. James Jacob, Deane Neubauer,
and Huiyuan Ye note how Australia and New Zealand continue to play a dominant role that influences higher education in a region that covers nearly
half the world’s surface. Six comparative case study exemplar university financial models are introduced in this paper: Far Eastern University,
Philippines; including Wānanga higher education institutions, New Zealand; National University of Singapore; University of Hawai‘i System, USA;
Brigham Young University – Hawai‘i; and University of the South Pacific, Fiji and Oceania. Each of these exemplar funding and delivery models
address unique challenges related to distance, diverse populations, and technology.
W. James Jacob, Ka Ho Mok, Sheng Yao Cheng, and Weiyan Xiong provide an overview of the historical evolution of higher education financing
in their article titled “Changes in Chinese higher education: Financial trends in China, Hong Kong and Taiwan.” The authors provide findings that
address how innovative financial models in three Greater China region higher education systems contribute to (1) improving higher education
quality, (2) providing HE opportunities to under-representative populations, (3) solving problems caused by rising tuition, (4) decreasing the HE gap
between different areas and groups of populations, and (5) meeting the growing demands of globalization and internationalization. Several HE
funding and delivery exemplars are provided from each location, where successful HE community engagement partnerships are described.
Gustavo Fischman and Molly Ott discuss Latin American Public Universities (LAPU’s) in their historical and socioeconomic context in their paper
titled “Access, equity and quality trends in Latin America's Public Universities.” The authors explore the role of LAPU’s, with special attention to the
so-called “macro-universities” and their research mission. By doing so, the reader can fully appreciate the distinctive role of the macro-university and
the requisite public financial resources needed to support their activities. This article contributes to our understanding of the critical role assigned to
LAPUs, and offers data on public funding on a regional and national basis. The authors conclude with a synthesis of funding, governance and other
challenges facing LAPUs as they attempt to satisfy “the public good.”
Three issues are addressed by Keith J. Roberts in his article “Community engagement in Indian higher education: Financial and partnership
trends:” neoliberal economics, business/ government relationships, and philanthrocapitalism. He notes how India’s continues its transition from
primarily public funding of HE to user (parents and students) funding of HE, which is largely a result of the hegemony of neo-liberal economic and
social theory. Industry has also played a key role in the financial development and expansion of the HE system in India, emphasizing a triple helix
relationship that exists between the HEIs, the government, and industry (Jacob, et al., 2015). Roberts also argues philanthropy is a key source of
funding for Indian HE, especially in its impact on the formation of private universities in satisfying the need for increased access in the second-largest
HE system. He notes how some of the most prestigious Indian HEIs remain under the control of their founding families and that each of these HEIs
provides a unique approach to both funding HE and supporting some of the most disadvantaged students.
The paper “Higher education financing in Japan,” written by Futao Huang, offers a wealth of data as it explores changes made to public funding
of national and local public universities in Japan. It focuses attention upon ways that basic public funding has evolved since the 1990’s, including

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examples of specific changes and their consequences. With attention to the public policy and socio-economic context for public universities in, the
author delves into changes in public funding and their implications for institutions in each sector of public higher education and traces the trend
toward grant based research funding and away from general budget allocations. In doing so, the author distinguishes between the roles of uni-
versities, technical colleges and junior colleges.
Korea is among only a handful of locations that enjoys universal higher education. In their article “Lessons learned from financing universal
higher education in Korea,” Byoungjoo Kim and Namgi Park share how despite its HE prominence, Korea still has many challenges when it comes to
financing HE. They identify nine financial challenges that are most poignant: instability of government funding, lower-than OECD average of
government funding, unnecessary overlap of similar and sometimes competing programs, inconsistency in government funding goals, structural
reforms requirements and assessment-based funding, imbalance among financial support targets, unpredictability of continued government funding,
private HE relies too heavily upon tuition fees, and various causes that require tuition increases. The authors also provide recommended solutions on
how to best overcome these nine identified challenges. These solutions include financing higher education grants, introducing a higher education
tax, establish HE formula funding, provide greater support for local HEIs, provide government support for private HEIs, and ensure HE financial
support is oriented to student needs.
In Gury Zilkha’s “Innovative higher education learning outcomes and financing trends in Israel,” we learn about the evolving role of public higher
education within the context of challenges posed by enrollment growth, reflective changes by the government funding authority (Planning & Budget
Committee of the Council on Higher Education), and funding made available to support the research and professional training needs within the
public universities. This article quantifies enrollment growth at several leading public universities, and explores the drivers of enrollment growth. It
examines systemic strengths and weaknesses, and compares Israeli public higher education to other countries.
Jennifer Iriti, Lindsay Page, and William E. Bickel bring considerable outcome-based expertise to a study of systemic challenges weighing upon
access and attainment of underserved high school students entering post -secondary education. In “Place-based scholarships: Catalysts for systems
reform to improve postsecondary attainment,” the authors consider such variables as student aspirations, preparedness for college and university
educations, lack of exposure to programmatic opportunities, and financial barriers. The authors call for comprehensive systemic reforms, while
exploring the merits of relatively newer “place-based” scholarships in places such as Pittsburgh, Pennsylvania; El Dorado, Arkansas; and Kalamazoo,
Michigan.
Sarah E. W. Hansen contributes the final paper in this special issue titled “Improving educational and financial effectiveness through innovation:
A case study of Southern New Hampshire University’s College for America.” Southern New Hampshire University, through its College for America
(CFA), provides a fertile foundation for considering the merits of a more recent iteration of competency-based education. In this article, Hansen
examines both the broad context in which CFA is evolving, and shares the results of on-campus interviews conducted during doctoral dissertation
research at the University of Pittsburgh. The author shares data in making the case for reforming delivery models, and shares many insights gained
through her field research.

Conclusion

Certain commonalities are found in many countries between the mission of higher, public higher education policies, and funding, and the socio-
economic and political context in which postsecondary education functions. On one hand, the multi-functional role of higher education, and its’
critical importance in developing human capital, is widely recognized. On the other, public funding to yield an ample supply of well-prepared college
and university graduates is disproportionately low and often unpredictable. Other budgetary demands receive greater attention. While some HEIs
have made tremendous progress to address these issues, this dichotomy is unlikely to change in the foreseeable future. On the whole, our authors
seem to agree on these observations, as no one posits to have discovered nirvana.
If financial subsidies from public sources continue to lag enrollment growth, then more solutions to creating a financial model supportive of
educational and student services quality must come from within. Crossing the divide between preschool and postsecondary education must be
rendered more seamless. Learning outcomes must be student-centric, thoughtfully articulated, relevant, and measureable. Planning must be evi-
dence-based, with senior administrators and faculty alike prepared to treat change as more cathartic than objectionable.
In this environment, curriculum and instructional pedagogy aligns with institutional mission and program objectives. Educational, student
services and administrative functions thrive within organizational structures that enable students to learn and grow. Operational and administrative
processes pursue efficiencies by expediting decision-making, substituting technology for expensive time-consuming paper and labor-intensive work
flows, and yielding transparent management reporting.
Several years ago the American Association of Community Colleges launched an introspective and comprehensive study of challenges facing their
institutional members. To paraphrase one of the observations of their 21st Century Commission, college leaders must do more than implement
institutional legacies and be capable of redesigning them. This calls for embracing change rather than wholesale denial of responsibility, and for
internal stakeholders to assume ownership of their institutional destinies.
We are living in an unprecedented era where advancements in technology can help widen the outreach of higher education offerings to students
in even the most rural and remote regions of the earth (e.g., in much of Oceania, the Himalayan mountain region of Nepal, India, Bhutan, China, and
Pakistan; and throughout much of Sub-Saharan Africa) (Jacob, 2015). While technology cannot solve all the challenges of HE equity and access, it
can help make the delivery possible and more affordable (Jacob and Holsinger, 2009). Several of the articles in this special issue highlight many of
the ways in which optimal delivery models are providing quality HE offerings to even the most disadvantaged and remote individuals.
Each of the articles in this special issue examine innovative financial models that facilitate the development of HE in their respective contexts.
Some HE exemplars are local, while others are national and global in their reach. Some models were just launched within the past five years, so it is
much too early to recognize how successful and sustainable they will be long-term.
Government backing has been identified throughout as a key driver to support innovation in HE funding and delivery to reach some of the most
distant and disadvantaged populations. In some countries, successful and supportive government policies have been in place for decades and remain
relevant in providing a foundation for innovative practices today. Where the policies fall short, others will need to emerge to help each location meet
the growing demands of inequality and globalization.

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References

Christensen, C.M., 2017. Keynote address at the Salesforce Higher Ed Summit 2017, Austin, TX, 27 April 2017.
Christensen, C.M., Eyring, H.J., 2011. The Innovative University: Changing the DNA of Higher Education from the Inside Out. Jossey-Bass, San Francisco, CA.
Hess, A., 2017. Harvard Business School professor: Half of American colleges will be bankrupt in 10 to 15 years. CNBC, Englewood Cliffs, NJ, 15 November 2017.
Jacob, W.J., 2015. Social Media, Social Intelligence, and Emerging Trends in Higher Education Communication. In: Neubauer, D., Ghazali, K. (Eds.), Technology and Workplace Skills for
the Twenty-First Century: Asia Pacific Universities in the Globalized Economy. Palgrave Macmillan, New York, pp. 25–36.
Jacob, W.J., Holsinger, D.B., 2009. Inequality in Education: A Critical Analysis. In: Holsinger, D.B., Jacob, W.J. (Eds.), Inequality in Education: Comparative and International Perspectives.
Comparative Education Research Centre/Springer, Hong Kong & Dordrecht, The Netherlands, pp. 1–33.
Jacob, W.J., Sutin, S.E., Weidman, J.C., Yeager, J.L. (Eds.), 2015. Community Engagement in Higher Education: Policy Reforms and Practice. Sense. Publishers, Boston, MA.
Lederman, D., 2017. Clay Christensen, Doubling Down. Inside Higher Ed, Washington, DC, 28 April 2017.
Sutin, S.E., Jacob, W.J., 2016. Strategic Transformation of Higher Education: Challenges and Solutions in a Global Economy. Rowman & Littlefield, Lanham, MD.
Warner, J., 2017. Disruptive Innovation? More Like Destructive Innovation. Inside Higher Ed, Washington, DC, 21 November 2017.

Guest Editor
W. James Jacob
University of Memphis
Guest Editor
Stewart E. Sutin
University of Pittsburgh