Universities in the United States (US) are the envy of the world because they attract students from all over the world, due to the high quality of education that they offer. Many, however, are confronting severe challenges in the areas of affordability and access. In South Korea, since World War II, and in Singapore in recent decade, top-tier universities are increasingly modelling themselves after US research universities. It is therefore important that policymakers in Asia pay attention to issues faced in the financing of US higher education, though a number of fundamental differences should be noted.
The university systems in Asia, and particularly the prestigious, research-intensive universities, tend to be public ones. They were established in their current form after independence, in tandem with the setting up of national education systems and other administrative apparatuses. Although the direction has shifted towards greater institutional autonomy and corporatisation of the universities, in general, governments continue to exert considerable influence in their operations. This has meant relatively more state control over the setting of tuition fees, which are lower compared to the US system. The quality of education in some universities in Asia may indeed be a long way from their counterparts in the US. Quality and access may even be seen by some as competing values in a zero-sum game.
I outline some of the current concerns around the problems of college access and affordability in the US in this article, and offer some policy perspectives to the problems now emergent in Asia. In today’s knowledge economy, earning a postsecondary credential has become a prerequisite for employment. There is much evidence pointing to a correlation between the educational attainment of a state’s workforce and median wages; in general, additional years of education result in higher earnings. However, while most Asians still want a college degree, students in the West are questioning the value, given the mounting costs.
Community colleges in the US, which are two-year public institutions offering skills training as well as a pathway to a four-year university, have been seen as important for students from low-income families, and have a large representation from minority groups.
INCREASING COST OF COLLEGE AND DEBT GLOBALLY
The cost of a college education has increased manifold over the years and exceeds the rate of inflation. Tuition has increased four times compared to the consumer price index, with the actual cost rise in the US at a staggering 1,100% since the 1970s.
In April 2016, Times Higher Education reported that graduates in England face higher debts than do their counterparts in US — in fact higher than all English-speaking countries. There are a number of reasons for the exponential increase in debts related to college education worldwide. In private colleges and universities, the rising costs are attributed to the costs of professors and other personnel, the costs of new facilities and technologies and the costs of other novel state-of the art facilities, such as campus-wide Wi-Fi. For public institutions, the cost increase to students is directly related to funding cuts at the government and state levels. The higher costs for operations are passed on by the institutions to the students, and this is reflected in tuition fee increases. This results in higher student loan and debt, and students graduate either being unemployed or underemployed in a weak economy.
The necessity to lower the costs of college is critical for students from lower socioeconomic backgrounds. The policy reforms for increasing affordability should be targeted towards tuition cost reduction and alternate ways to lessen the debt burden for students. There has to be an alternative policy designed to restrain further tuition increases in colleges that would force the institutions to come up with creative solutions of cost-sharing and personnel sharing. Grant awards like the Pell Grant program need more funding to support the minorities and to keep up with inflation and the growing costs of college.
Some egalitarianism features of university systems in Asia may appear to trump those in the US. In terms of access for minorities, and considering the kinds of scholarships and grants available to them, these are guaranteed — sometimes by law — at a quota in a range of developing and developed countries, from Vietnam to Myanmar to China to Singapore.
This usually stems from a national constitution that guarantees the rights and privileges of minorities in areas that include education, as well as from the socialist character of some of these countries. In Malaysia though, where affirmative action policies re available for bumiputera (“native”) Malays for public universities, there is clearly a negative impact on egalitarianism.
The situation surrounding the student loans in Asia is mixed. For example, in Singapore, which has two high-ranking universities, the government subsidises a huge fraction of university education through a major tuition grant scheme, and offers additional loans and grants to meet student needs. The government’s Central Provident Fund (CPF) Education Scheme facilitates the payment of subsidised tuition fees for several full-time programmes for students. The government is also reviewing if there is scope to make its loan schemes more attractive as an additional source of funding, without imposing undue loan burdens on students.
In the Philippines, however, the sustainability of student loan schemes is a concern for the government. The passage of the American-sponsored Private School Law in 1917 during the colonial era, granting private colleges and universities full autonomy both in funding and control, spawned the widespread growth of private higher education institutions in the early 20th century. Today, a public higher university system exists alongside private universities, with tuition fees kept low, due in part to considerable political pressures and left-leaning ideologies prevalent in the country, especially after the end of the authoritarian Marcos era in 1986.
The result of this is the prevalence of significant disparities between public and private highereducation institutions; there are major differences in unit costs per student, tuition fees charged and government subsidies. The Study-Now-Pay-Later student loan plan, administered by a government agency particularly for students attending private higher education institutions, had been plagued for years by repayment defaults — though more for reasons of weak debt collection reinforcement than because of insurmountable debt levels as in the US case.
The broad affordability and cost issues confronted by the US in the financing of higher education needs urgent attention by policymakers in Asia. While developing countries in Asia are undergoing, in most cases, rapid economic growth, an in-depth look at the focus on the quality of higher education visa-vis regulating cost structure when benchmarking with US universities is needed. It is important to consider these issues rather than just seek to emulate the top US universities. A realistic and unbiased perspective is required when considering all alternatives for reducing tuition costs, and no one model is perfect. The question on the table is how these policies can be made sustainable in the long-term. A key policy dilemma will be balancing public access, quality and affordability in Asian higher education.
Uma Natarajan is Principal Researcher at The HEAD Foundation, Singapore.