Private investment is vital to safeguard our university system
Discussions about how to achieve sustainability in financing higher education stems, in part, from the tension in most countries where the need to trim overall government spending runs smack into the fact that more education equals better employment chances and boosts financial returns over an individual's lifetime.
This tension is apparent in Ireland, where recent efforts to bring public spending under control contrast with continued long-term growth in private and public returns to higher education.
But when competition is increasingly globalised, failure to plan for sustainability is, simply, unsustainable. In a paper being presented this morning to an Irish Universities Symposium: '21st Century Universities, Performance and Sustainability', I look at this issue and recognise four realities.
First, we should agree on what represents a sustainable higher education policy and recognise that achieving sustainability must be coupled with funding stability and the need to promote innovation as part of any national strategy.
Second, we should recognise that countries differ widely in their economic strength and their demographic profile and that these are important considerations in developing national higher education strategies. Countries with rapidly growing populations are much less likely to be able to massify their higher education systems than countries where the numbers of young people are declining. Similarly, high-income countries have advantages over middle or low-income countries.
Historically, Ireland's economic performance has mirrored its rugged landscape, with deep valleys of recession giving way to uplands of intensive growth before a slide into the next depression. The country's demographics, on the other hand, have followed a steadier upward trajectory. This, combined with a concerted effort to improve completion rates at second level and increase participation rates at third level, has left Ireland with a poorly funded and unsustainable higher education system, when measured on a per student basis.
The recent economic crisis has exacerbated the problem significantly, leaving Ireland as almost unique among OECD countries with sharp increases in student numbers and large decreases in overall funding per student.
Thirdly, competitive modern universities rely on research to generate the ideas and methods on which cutting edge tuition is based. As such, a national policy on research needs to take full account of the higher education dimension. Frequently, however, such alignment is not achieved, especially when it comes to research supporting tuition, as opposed to consultancy type work aimed at short-term industrial needs.
Finally, it is important to recognise that getting governance right is a big part of ensuring an effective financing strategy. The countries that do best at achieving sustainable and stable higher education policies and funding levels are those that strike the right balance between government steering, institutional autonomy and enterprise involvement.
Recognising each of these realities does not eliminate the requirement to make hard choices about the scale and quality of Ireland's higher education system and how it is funded.
Since it appears that politicians and policymakers continue to favour increased participation and further massification of the system, the inevitable consequence is that the nettle of funding sustainability must be grasped.
Achieving more sustainable policies depends on how much the Government spends and what proportion of national income should go into higher education, taking account of the gains to the economy and society from such investment. The biggest issue facing Irish higher education may not be the level of national investment but the mix of public and private funding. From an international perspective, Ireland has a modest level of public investment in higher education and a very low level of private investment from private sector investments or philanthropy.
The key then for achieving sustainable policies in the future is for Ireland to increase its level of private investment while stabilizing and maintaining public investment levels in higher education.
This can be done in ways that don't require extraordinary sacrifice from parents and students, including a reconsideration of the fee and student support schemes that would rely on private funds to pay for most future growth in the system. Sustainability cannot be accomplished by maintaining existing policies that place almost total dependence on the public sector to fund rapidly growing demand for higher education.
Arthur M Hauptman is an American public policy consultant specialising in education finance