Changing Trends in Financing of Higher Education: A Critical Review

  Education in general and higher education in particular has significant favourable influence on economic development, which calls forth investment in the sector by individuals, households and nation as a whole. However, over the years, many developing countries have showed apathy towards development of higher education. They have reduced public investments in higher education, allowed laissez-faireism, and even adopted policies towards marketisation of higher education. To the extent that the markets in developing countries are ‘incomplete’ and ‘imperfect’, the outcomes are also far from perfect. However, to compete in a global knowledge economy and to traverse along the growth path achieved by the developed countries, the developing countries like India have to accord top priority to higher education. To achieve the 12 th Plan targets of 25.2 percent of GER by 2017 and / or to reach the global target of investing 6 percent of GDP in education, India needs to explore the innovative methods of financing of the sector. In this context, this review paper traces the changing trends of financing higher education across the globe over the years and the entry of private sector into the arena.