Rethinking Higher Education Financing: Comparative Evidence on Equity, Capacity, and Social Value

Abstract

Higher education finance is often debated through statutory tuition, although this indicator does not capture system capacity or the burden students actually experience. This article examines European higher education financing by distinguishing between statutory price, cost benchmark, and effective student burden. The study uses a comparative cross-sectional design based on linked public datasets: Eurydice fee and support indicators for 39 systems, EUROSTUDENT 8 indicators on student expenses and financial difficulty, and OECD, Eurostat, UNESCO, and World Bank data on expenditure, national income, and funding mix. The analysis combines regime mapping, Spearman rank correlations, parsimonious ordinary least squares models with HC3 robust standard errors, and robustness checks. The results show that GDP per capita is weakly associated with statutory tuition but more clearly associated with expenditure per tertiary student. Statutory fees also provide a weak guide to severe student financial strain, whereas weighted effective burden better captures the share of students exposed to payment and the resources available to absorb it. Lithuania illustrates the policy relevance of this distinction: low statutory fee indicators coexist with modest per-student expenditure and non-trivial effective burden. The article concludes that policy debate should move from headline tuition comparisons toward a three-part assessment of price, capacity, and burden.