Volume : II, Issue : III, December - 2012

Financing Higher Education: A Technical Analysis of the Subsidy Issue

Nissar A. Barua

Abstract :

Any discussion on higher education evokes passionate debate as radically divergent views are presented on almost every facet of the issue. However, the issue of state subsidy in higher education always generates the biggest controversy. The demand for higher education by an individual depends upon a host of factors that includes the cultural background, traditions and values , family income, status and of course the sex of the potential recipient. However, the two principal factors that determine the demand are the private benefit of higher education and the direct and indirect cost of accessing it. With a substantial level of state subsidy in higher education, the direct private cost of education is significantly reduced making the benefit, net of cost appear to be significant. This leads to an enormous surge in the demand for higher education that has a number of adverse consequences for the economy. Hence, the proponents of the free market economy argue in favour of reversing the distortions created in the economy by extension of subsidy to higher education. However, supporters of subsidies point out the role of higher education in creating a more egalitarian society; economically, socially and politically. It is also argued that higher education, as other forms of education generate external economies, which enhance the welfare of the society besides benefiting the primary recipient.  

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Nissar A. Barua Financing Higher Education:A Technical Analysis of the Subsidy Issue Indian Journal of Applied Research, Vol.II, Issue.III December 2012


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