June 4, 2010 1

Presented by:Al Alt

Knowledge economy is driving the world ◦ Despite knowledge economy, education is in

“crisis” due to fiscal stress (World Bank, 1994)

Despite knowledge economy, education worldwide is in crisis (World Bank, 1994)

Fiscal stress due to demands on public funds driving fiscal stress

June 4, 2010 2

All major industrialized nations are grappling with the issue of financing education

There are several reasons contributing to a worldwide struggle to fund higher education:◦ Taxation◦ Supply and Demand◦ Opportunity Cost

June 4, 2010 3

All major nations fund a portion of higher education through taxation◦ Even developing countries contribute significant

public funds to higher education In major developed nations, taxation cannot

keep pace with the rising cost of higher education

In developing nations, taxation is not efficient enough or sufficiently developed

June 4, 2010 4

Supply of higher education is greater than ever

Demand pressure is greater than supply◦ Increase in college aged population◦ Increase in people desirous of higher education

Students are informed consumers, the knowledge economy is driving the world

June 4, 2010 5

Constrained public dollars are creating competition and foregone opportunities for public dollars

There are severe unmet needs of other choices dominate the funding of higher education◦ Infrastructure◦ Public health◦ Compulsory education◦ Transportation

June 4, 2010 6

National Trends follow worldwide trends

Rising unemployment is driving demand for higher education

78 million baby boomers are preparing for retirement◦ largest and best educated generation in the

nation’s history ◦ state spending on higher education will have to

increase faster than state spending in other areas

June 4, 2010 7

Efficiency◦ Become more client responsive◦ Higher education as a business

Public vs. Private◦ Notion of private being more efficient◦ Diversification of offerings

Cost sharing◦ Additional fees and tuition borne by student◦ Loans and grants

Supplementing governmental funds◦ Philanthropy and entrepreneurship

June 4, 2010 8

Higher education worldwide in “fiscal stress”◦ High demand on public dollars◦ Opportunity cost related to other public programs◦ Taxation cannot keep pace◦ Demand for higher education is extreme

National and worldwide solutions are uniform◦ Efficiency◦ Cost Sharing◦ Public vs. Private◦ Philanthropy and entrepreneurship

Reform is being driven by knowledge economy and excess demand

June 4, 2010 9

June 4, 2010 10

Presented by:Al Alt