Cost-Sharing in Financing Higher Education

The term cost-sharing has two connotations in connection with the financing of higher education. The first is a statement of fact: that higher education’s instructional costs as well as the costs of student living are perforce shared among the following parties:

• Governments (or the general citizenry) via taxation, the confiscation of purchasing power via governmentally induced inflation, or in some countries by the exploitation of public assets such as the state sale of oil or minerals

• Parents, from current family income, family savings, or future income via parental borrowing

• Students, from savings, summer or term-time employment, or borrowing

• Philanthropists, through past giving (e.g., endowment) or current giving

Philanthropy is not yet a significant and widespread source of revenue for higher education other than in the United States and, to a lesser degree, in the constituent units of the United Kingdom, Canada, and a few other countries. According to the National Center for...