1. FinancingPublicEducation

2. FinancingProviding thenecessary capital. 3. What Does Financing Mean?The act of providing funds for businessactivities,makingpurchasesor investing. Financial institutions andbanks are in the business of financing astheyprovidecapitaltobusinesses, consumers and investors tohelp them achieve their goals. http://www.investopedia.com 4. Finance is the art of passing currency from hand to hand until it finally disappears.-Robert W. SarnoffFinancial education needs to become a part of ournational curriculum and scoring systems so that itsnot just the rich kids that learn about money.. its allof us. David Bach 5. Contexts for education spending The macroeconomic situation andpublic scal policy have an immediateand important impact on resourcesavailable for education. The economic Economic instability constrains theresources available for education. 6. Sources and ows of education funding 7. Public sector expenditure refers tofunds spent by governments oneducational institutions. This source offunding can be further divided bydifferent levels of government (e.g.central, regional and local) that haveresponsibilitiesfornancingeducation. 8. The private sector includescontributions fromindividuals, households andother private entities (e.g.religiousgroups, rms, associations). 9. International sources of funding make uponly a very small proportion of total educationexpenditure. These include loans and grantsfrom multilateral organizations(e.g.development banks), bilateralaid andcooperation, and funds from internationalNGOs. These funds are typically channelledthrough central governments but, on rareoccasions, they are transferred directly toeducational institutions. 10. This model of education nance incorporates the three main sources offunding for education: the public sector, the private sector, and internationalsources. 11. Funds from all of these sources are destinedfor educational institutions, which arebasically those that provide instructionalservices to individuals or education-relatedservicestoothereducationalinstitutions, regardless of who governs them.With respect to governance, it is important todistinguish between the funding source andthe service provider (e.g. public or private). 12. Governmenteducational dened asinstitutions arethose which are state-managedand publiclynanced. 13. Government-dependent refers to institutions thatare independently managed but receive substantialsupport more than 50 per cent of operating funds from the state. Independent private institutionsare those that are independently managed andreceive less than 50 per cent of total expenditurefrom government sources. Despite the fundingdistinction, the two categories are typically groupedtogether as the private sector. 14. Funding foreducationalinstitutions is bothdirect and indirect. 15. An example of a direct ow wouldbe funds given directly to theeducational institution either by thestate or by households, e.g. tuitionfees. 16. An indirect ow is one that is allocatedthroughthe othersector.Forexample, private expenditure may indirectlysupport education via state taxation andpublic funds may ow indirectly toinstitutions through a wide range ofsubsidies provided to individuals andhouseholds. 17. this circular path reiterates an importantprinciple of education funding. Keeping inmind the differences in the capacity acrossand within the public and private sectors toprovide resources, there is only one pool ofresources and many different ways for it toow to educational institutions. 18. thestate plays thepredominant role in themanagement and nance ofthe education system. 19. Public education spending by government levelIn order to distinguish between spending by governmentlevel, it is important to rst understand the generalgovernance structure of a country. 20. In most countries, the governancestructure consists of two or three mainlevels of authority. These include acentral government,regionalgovernment agencies and localgovernment agencies. 21. The relative importance of each of theselevels in terms of education decision-makingdiffers greatly among countries, largely theresult of overall political governancestructures. Countries where political power iscentralized will see more decisions at thehighest levels and where political power isdecentralized at regional or local levels(NCES, 2002). 22. the central government is more likely to beresponsible for decisions central governments may have the lead rolein planning, structures and personnelmanagement while schools make mostdecisions about the organization ofinstruction. the central government makes decisionsabout the allocation and use of funds foreducation but local authorities seldom havechief responsibility. 23. GDP DefinitionGross Domestic Product. The total marketvalue of all final goods and servicesproduced in a country in a givenyear, equal to total consumer, investmentand government spending, plus the valueof exports, minus the value of imports. 24. What Does Macroeconomics Mean?The field of economics that studies thebehavior of the aggregate economy.Macroeconomics examines economy-widephenomena such as changes inunemployment, national income, rate ofgrowth, gross domestic product, inflationand price levels. 25. What Does Fiscal Policy Mean?Government spending policies thatinfluence macroeconomicconditions.These policies affect tax rates, interestrates and government spending, in aneffort to control the economy. 26. Equityin general, you can think of equity as ownership in anyasset after all debts associated with that asset are paid off.For example, a car or house with no outstanding debt isconsidered the owners equity because he or she canreadily sell the item for cash. Stocks are equity becausethey represent ownership in a company. 27. Contextisthesurroundings, circumstances, environment, background, or settingswhich determine, specify, or clarifythe meaning of an event. 28. SUBSIDYmoney granted by one stateto another