The Financial Sustainability of Higher Education

The financial sustainability of higher education is a growing - albeit far from new - concern in OECD countries. For higher education to be financially sustainable, it needs to recover the costs of its day-to-day activities and be able to invest enough in physical, human and intellectual capital to deliver on strategic goals and serve students and society. Achieving this requires a realistic vision of what higher education should deliver, adequate resources to fund these ambitions and tools to ensure higher education systems are configured to work effectively and that objectives and resourcing can be adjusted if they become misaligned. This report aims to provide inspiration for policy makers and stakeholders working on higher education funding by exploring how funding systems can influence delivery of system and institutional objectives. It does so by focusing on three aspects of policy: understanding costs and the level of resources likely required to achieve specific goals; the extent to which policy can influence the revenue mix of higher education providers and the main policy tools that can be used to allocate and steer the use of public funding to the higher education sector.