Indicator C5. How much do tertiary students pay and what public support do they receive?
OECD countries fall into three different groups when it comes to tuition fees and direct financial support to tertiary students: no tuition fees and high financial support to students, high tuition fees and high financial support, and low or moderate tuition fees and targeted financial support for a smaller share of students.
The level of tuition fees charged by institutions for a master’s programme sometimes reflects labour-market opportunities. Average tuition fees charged by public institutions are higher for a master's degree than for a bachelor's degree in 16 out of the 25 OECD countries and other participants with data.
Annual fees charged by public institutions for master’s programmes in education; arts and humanities; and natural sciences, mathematics and statistics are among the lowest of all fields of study in most countries.
Independent private institutions are less affected by government regulation and have often more freedom to set tuition fees. As a result, they charge higher annual tuition fees than public institutions for master’s programmes in all OECD countries, except in Chile and Lithuania.
Context
OECD and partner countries have different approaches to providing financial support to students and to sharing the costs of tertiary education among governments, students and their families, and other private entities.
Tuition fees help bridge the gap between the costs incurred by tertiary educational institutions and the revenue they receive from sources other than students and their families. Many factors may influence the costs, including teachers’ and researchers’ salaries, the development of digital learning and non-teaching services, changes in demand for tertiary education, investments to support internationalisation, and the amount and type of research activities undertaken by faculty and staff. Tertiary institutions may partly cover their costs through internal resources (endowments and research grant funding) or revenue from private sources other than students and their families (see Indicator C3). The remainder is covered by students’ tuition fees and public sources.
Public support to students and their families can be a way to encourage participation in education, while also indirectly funding tertiary institutions. Channelling funding to institutions through students may also help to increase competition among institutions and encourage them to better respond to student needs. Support for students comes in many forms, including means-based subsidies, family allowances for students, tax allowances for students or their parents, and other household transfers. Governments strive to strike the right balance between these different subsidies, especially in periods of strained public budgets. For some types of subsidies, public support such as tax reductions may provide less support for low-income students than means-tested subsidies, as tax reductions are not targeted specifically at low-income students. However, such measures may still help to reduce the financial disparities between households with and without children in tertiary education.
Other findings
OECD governments support students’ living or educational costs through various combinations of loans, grants or scholarships. In most countries with no tuition fees at the bachelor’s level, students tend to receive financial support for living expenses in the form of both loans and scholarships or grants. In countries with low or moderate tuition fees, less than half of students receive financial support, and those who do mainly receive it only in the form of grants or scholarships. There is more variation among countries with high tuition fees, but one common pattern is that students tend to rely to some extent on income-contingent loans.
Means-tested grants, awarded on the basis of financial need, are the most common type of grant and are in use in more than two-thirds of the countries with available data. About half offer merit-based scholarships (i.e. awarded on the basis of academic, athletic, or artistic merit) and more than one-third target scholarships on disadvantaged population groups. These different kinds of grants can operate simultaneously, so 10 of the 26 countries with data award both merit-based and means-tested scholarships.
Tuition fees are higher for foreign students than for national students in half of the OECD countries. The higher tuition fees charged in some countries for foreign students do not necessarily discourage them from studying abroad. In Australia, Canada, Ireland and New Zealand, international students represent at least 15% of students enrolled in master's programmes, even though foreign students pay some of the highest tuition fees across OECD countries (see indicator B6).
Differentiation of annual tuition fees for full-time study
Differentiation by level of study
Entering tertiary education often means costs for students and their families, in terms of tuition fees, foregone earnings and living expenses, although they may also receive financial support to help them afford it. Most national students entering tertiary programmes enrol at bachelor’s or equivalent level in OECD countries (see Indicators B1 and B4). Public institutions do not charge tuition fees to national students at this level in one-quarter of countries with data, including Denmark, Estonia (only for programmes taught in Estonian), Finland, Norway, Sweden and Türkiye (Figure C5.1). In a similar number of countries, tuition fees are low or moderate, with an average cost for students of under USD 3 000. In the remaining countries, tuition fees are high or very high and range from about USD 4 000 to over USD 8 000 per year. They exceed USD 12 000 in England (United Kingdom), where there are no public institutions at tertiary level and all students enrol in government-dependent private institutions (Figure C5.1).
Continuing education after upper secondary or post secondary non-tertiary graduation has become the norm for students in most OECD countries. Short-cycle tertiary programmes are also expanding in many OECD countries, as they provide a shorter and cheaper tertiary education and, in a number of countries, a better benefit-to-cost ratio than long-cycle tertiary programmes such as bachelor’s and master’s programmes (OECD, 2019[1]). Tuition fees for short-cycle tertiary programmes in public institutions are generally lower than for bachelor’s programmes. They are free of charge in Denmark, France, Spain, Sweden and Türkiye and amount to less than half the tuition fees for bachelor’s programmes in Chile and the United States, where they cost less than USD 3 800 per year. In contrast, tuition fees for short-cycle tertiary programmes in public institutions are the same as for bachelor’s programmes in the Flemish Community of Belgium and the Netherlands. In Norway, short-cycle tertiary (ISCED 5) is the only tertiary level where fees are charged, although only 22% of public institutions do so (Figure C5.1).
Continuing tertiary education after a bachelor’s degree leads to better labour-market outcomes. Graduates with a master’s or doctoral or equivalent degree have better employment opportunities and earnings prospects in most countries (see Indicator A4). Tuition fees are higher for a master's degree than for a bachelor's degree in 16 out of the 25 OECD countries and other participants with data. In the remaining 10 countries, despite the earnings advantage they offer, tuition fees in public institutions for full-time national students are similar to those for bachelor’s programmes. In the 6 countries where tuition is free of charge at bachelor’s level, there are also no fees at master’s or doctoral levels. Similar tuition fees are also charged on average for bachelor’s and master’s programmes in Austria, the Flemish Community of Belgium, Japan and the Netherlands. In contrast, tuition fees for master’s programmes in public institutions are 25-50% higher than for bachelor’s programmes in Chile, France, Israel, Korea, New Zealand, Spain and the United States (data for the United States refer to master’s and doctoral programmes combined), while in the French Community of Belgium, Hungary and Lithuania, they are over 95% higher (Table C5.1). In the French Community of Belgium, the tuition fees charged by public institutions are on average higher for a master's degree than for a bachelor's degree, which conceals a differentiation by institution. Indeed, the fees for bachelor's degrees are lower in some institutions ("Hautes Ecoles") while they are identical to those charged for master's degrees in the others institutions. In the other countries, these higher fees may limit participation at this level if they are not combined with financial support to students but are more reflective of the additional labour-market opportunities a master’s degree provides in some countries.
Tuition fees for doctoral programmes are even less likely to be higher than bachelor's degrees than they are at master’s level. Public institutions charge higher fees for doctoral programmes than bachelor’s in only one-quarter of countries: Canada, Chile, France, Ireland, Korea, Latvia (government-dependent private institutions) and Lithuania. Among these countries, Lithuania is the only country where annual tuition for a doctoral programme is more than three times the tuition for a bachelor’s programme (Table C5.1).
Lower overall fees at the doctoral level can be explained by the existence of government subsidies for doctoral candidates, aligned to policy objectives to boost research in higher education institutions in some countries. Attracting the best doctoral students from around the world enables countries to take a leading role in research and innovation, and some countries have implemented policies to nurture an attractive research environment for potential students. In a few OECD countries and other participants (e.g. Australia, the Flemish and French Communities of Belgium and Italy), public institutions charge lower fees for doctoral programmes than for bachelor’s and master’s programmes to promote enrolment in doctoral programmes and attract talent for research and innovation. In Australia, for example, the average annual tuition fees in public institutions for doctoral programmes are about 25 times lower than for bachelor’s programmes (about USD 200 compared to USD 5 000). In fact, very few national doctoral students are charged any fees in Australia (less than 5% of doctoral students in public institutions). Other countries recognise doctoral candidates as employees rather than students, such as in Norway (Table C5.1).
Trends in tuition fees
In about one-third of the OECD countries and other participants with available data, tuition fees for master’s degrees charged by public institutions for national students have increased by at least 19% over the past decade, in real terms. This is the case in Australia, the Flemish Community of Belgium, Canada, New Zealand and the United States. The largest increase has been in the Flemish Community of Belgium, where tuition fees have increased in real terms by 64% since 2009/10. In contrast, tuition fees for master’s programmes in public institutions fell in real terms during this period in Austria, the French Community of Belgium, France, Germany, Ireland and Latvia (for government-dependent private institutions). Among the countries with data that did not charge any tuition fees (Denmark, Finland, Norway and Sweden), the position has not changed for national students, but Finland and Sweden introduced tuition fees for foreign students over this period. In Chile, the Netherlands and Spain, tuition fees have remained fairly stable and have not increased in real terms by more than 15% between school years 2009/10 and 2019/20 (Table C5.1).
Differentiation by type of institution
Over the decades, independent private institutions have developed to meet increased demand for tertiary education. On average, about one-quarter of students are enrolled in independent private institutions, but this figure hides large differences between countries. In half of OECD countries and other participants with available data, less than 15% of all tertiary students are enrolled in independent private institutions. In contrast, in three OECD countries – Chile, Japan and Korea – the majority of students are enrolled in independent private institutions. In addition, in England (United Kingdom) and Latvia, the great majority of students are enrolled in government-dependent private institutions (Table C5.1).
In general, independent private institutions are less affected by government regulation and less reliant on public funds than public institutions, and often have more freedom to set higher tuition fees. As a result, independent private institutions charge higher annual tuition fees than public institutions for master’s programmes in all OECD countries and other participants with available data, except in Chile and Lithuania (Table C5.1 and Box C5.2). In figures, in over one-third of OECD countries and other participants with available data, tuition fees for master’s or equivalent programmes are at least twice as high in independent private institutions than in public ones. Their tuition fees are over four times higher in Italy and Spain; more than two times higher in Israel and the United States; and less than twice as high in Australia, Hungary, Japan, Korea, Latvia and New Zealand. In Estonia and Germany, public institutions charge no or low tuition fees for a master’s degrees (in Estonia only for programmes taught in Estonian), while private institutions charge more than USD 5 200 in Germany and independent private institutions more than USD 11 100 in Estonia (Table C5.1).
Differentiation between national and foreign students
Tuition fee policies generally cover all students studying in a country’s educational institutions, including foreign students, (see Definitions section). Education levels have risen considerably over the last two decades, leading more and more students to enter tertiary education each year. This has led institutions in some countries to seek additional resources to guarantee the same quality of teaching. Many countries allow institutions to charge different tuition fees for particular programmes or groups of students, including foreign students, in an effort to strike a balance between public and private sources for tertiary funding. Within the European Union (EU) and the European Economic Area (EEA), countries charge students from other EU and EEA countries the same tuition fees as they do national students.
As a result, in over half of the 17 countries with available data, tuition fees are higher for foreign students than for national students, contributing significantly to the funding of tertiary educational institutions. In some of these countries, this difference can be significant. For instance, in Australia, Canada, Ireland, New Zealand and the United States, public institutions charge foreign master’s students (non-EU/EEA in Ireland) on average over USD 6 000 more per year than national ones. In the United States, tuition fees for foreign students also include tuition fees for out-of-state national students, which are equivalent. In Finland and Sweden, students from outside the EU/EEA are charged about USD 13 000 per year for master’s programmes in public institutions, while no tuition fees are applied to national (or EU/EEA) students. In France the difference is USD 4 800 more and in Latvia (for government-dependent private institutions) it is USD 2 700 more, while the difference is less than USD 1 000 in Austria and Hungary. In the other countries – Chile, Hungary, Italy, Japan, Korea and Spain – public institutions charge national and foreign students enrolled in master’s programmes similar tuition fees, while no tuition fees are applied to either national or foreign students in Norway (Table C5.1 and Figure C5.2).
Higher fees for foreign students can also affect international student flows (see Indicator B6), among other factors (OECD, 2017[2]). However, the data show that the higher tuition fees charged in some countries for foreign students do not necessarily discourage them from studying abroad. For example, in Australia, Canada, Ireland and New Zealand, international students represent at least 15% of students enrolled in master's programmes, compared to an average of only 13% in OECD countries, even though tuition fees for foreign students are among the highest across OECD countries (see Indicator B6 and Figure C5.2). Tertiary education in countries with higher fees for foreign students can still be attractive because of the quality and prestige of their educational institutions, the language spoken in the country, and the expected labour-market opportunities in the country after graduation, but also if, as observed in few countries, additional grants and scholarships are offered to foreign students from disadvantaged social backgrounds.
Variations within countries for degrees awarded at the same level
There are several reasons why tuition fees vary within countries, including whether institutions have autonomy to set their fees (either fully or within some limits), differences between fields of study (Box C5.1) or the fact that some programmes are cheaper to provide than others (e.g. law degrees are cheaper to provide than medical degrees). It explains why tuition fees vary not only across countries and educational levels, but also within countries for a given level of education. For instance, in the Netherlands, tuition fees are set by the government, but a few institutions may charge higher fees, up to five times the tuition set by the government. These fees are only allowed for certain programmes that meet specific requirements regarding small-scale and intensive education. As a result, annual average tuition fees for national students enrolled at master’s level in public institutions are around USD 2 600, but range from half of this amount to five times more (nearly USD 13 100), depending on the education provider (Table C5.1).
There is no clear pattern to the range of tuition fees charged for master’s programmes among the countries with the highest average tuition fees. For instance, among the countries charging high average tuition fees for a master’s programme (above USD 4 000), the maximum fee charged is 3-5 times the average in Ireland, Lithuania and New Zealand. In Australia and Hungary the highest fees are 2-3 times the average, while in Korea and the United States, the maximum fee charged is only 18-70% higher than the average tuition fee for national students enrolled in master’s programmes (Table C5.1)
The range of tuition fees is also wide in a few OECD countries and other participants with low or moderate average fees, such as France, Italy, the Netherlands and Spain. Tuition fees can exceed USD 3 300 in France, USD 4 000 in Italy, USD 13 000 in the Netherlands, and USD 20 000 in Spain, although the highest tuition fees in these countries only apply to a small number of students. In contrast, the range is relatively small in the Flemish and French Communities of Belgium, Israel (Table C5.1).
Tuition fee waivers are another reason why tuition fees vary within countries and why the fees paid by students might differ from those charged by institutions. When students receive a waiver, even though the tuition fee charged by an institution does not itself change, the fees paid are lower as the fee waiver is deducted. Compared to scholarships, which offer direct financial support to students, a tuition waiver is often granted by an educational institution and indirectly financed by the public sector to the educational institution or by the institution’s own resources, depending on the institution type and the type of waiver granted. Waivers can eliminate the cost of tuition for a designated number of credit hours, but cannot be used for any other educational expense. In a number of countries with available data (e.g. Belgium, Chile, France, Italy and Spain), between 19% and 38% of students enrolled at master’s level in public institutions, particularly students from low-income backgrounds, were benefiting from a scholarship or a tuition fee waiver in 2019/20 (Table C5.2).
OECD countries often charge different tuition fees by field of study in order to attract students to fields that are less in demand and to account for differences in costs and labour-market opportunities. These factors are the main reasons for introducing differentiated fees, although in some countries differences in tuition fees between fields of study may result from differences in tuition fees and enrolment across institutions rather than differences within institutions. For instance, in Australia, Hungary and New Zealand, fees are set by individual institutions, and broadly reflect cost-based differences while in Chile, both the relevance of the different qualifications to the labour market and the public cost of the programme are taken into account when setting the fees.
Among countries with available data, Australia, Canada, Hungary and Ireland have the largest range of tuition fees charged by public institutions to national students enrolled in master’s or equivalent programmes across fields of study. In Ireland, which has the widest differences, public institutions charge over USD 18 000 per year on average for master’s programmes in the broad field of business, administration and law but just over USD 7 600 per year for programmes in the field of arts and humanities (Figure C5.3).
Fees charged by public institutions for master’s programmes in education; arts and humanities; and natural sciences, mathematics and statistics are among the lowest of all fields of study in most countries. These are the fields of study where graduates’ labour-market wages are often lower than in other fields (OECD, 2021[3]). In contrast, fields such as health and welfare and business, administration and law are among the most expensive in many countries, as some of these programmes may have the highest market returns but more likely because of the (perceived or actual) cost of provision of education. Despite these trends, there are differences between countries in fees for the same fields of study. For example, while business, administration and law has the highest annual fees in Australia, Canada and Ireland, it is the cheapest of all fields of study in Lithuania. Similarly, while a year of study in agriculture, forestry, fisheries and veterinary care is the cheapest of the fields in Spain, it is the most expensive in New Zealand. These differences can be partly explained by structural differences between the economies of the countries but also by the value of qualifications on the labour market which varies from one country to another (Figure C5.3).
Approaches to public financial support to tertiary national students
Country approaches to financial support for tertiary students
Broadening access to higher education has been a public policy objective for decades, but the fiscal tools used to achieve higher tertiary attainment are quite diverse. Across different countries and economies, higher levels of educational attainment can be found where there are both high and low levels of fees (Cattaneo et al., 2020[4]).
OECD countries have different approaches to providing financial support to students enrolled in tertiary education. Regardless of the level of tuition fees, OECD countries and other participants can be categorised according to the level of public financial support available to tertiary students. In Australia, Denmark, England (United Kingdom), New Zealand, Sweden and the United States, at least 80% of national students receive in 2019/20 public financial support in the form of student loans, scholarships or grants, while this share is between 55% and 61% in Chile, Finland, Lithuania and Norway. Between 34% and 44% of students receive public financial support in France, Italy and Spain, while no more than 25% of students do so in Austria, the Flemish and French Communities of Belgium and Switzerland (Figure C5.4). In these countries and economies, public financial support targets selected groups of students, such as those from socio-economically disadvantaged families.
In the last decade, the share of students receiving public financial support in tertiary education has increased by at least 10 percentage points in Chile, Denmark, England (United Kingdom), Italy and Spain; the largest increases were in Chile (by 22 percentage points). This share has remained stable in all other OECD countries with available data, changing by at most 7 percentage points. The largest decrease in the share of students receiving financial support in tertiary education was observed in New Zealand (Figure C5.4).
When comparing tertiary student financial support systems with the level of tuition fees charged to national students, three groups of OECD countries and other participants clearly stand out: those with low or no tuition fees and high financial support to students (Denmark, Finland and Sweden); those with high tuition fees and high financial support to students (Australia, Chile, England [United Kingdom], Lithuania, New Zealand and the United States); and those with low or moderate tuition fees and targeted financial support received by less than 50% of tertiary students (Austria, the Flemish and French Communities of Belgium, France, Italy, and Spain) (Table C5.1 and Table C5.2).
Forms of public financial support to tertiary national students
What type of financial support is offered to tertiary students – whether in the form of loans, or of grants or scholarships – is a key question faced by many educational systems. On the one hand, advocates of student loans argue that they allow a larger number of students to benefit from the available resources. If the funding spent on scholarships and grants was used to guarantee and subsidise loans, the same public resources could support a larger number of students, and overall access to higher education would increase (OECD, 2014[5]). Loans also shift some of the cost of higher education to those who benefit from it the most – the individual students – reflecting the high private returns of completing tertiary education (see Indicator A5). On the other hand, student loans are less effective than grants at encouraging low-income students to access tertiary education. In addition, opponents of loans argue that high levels of student debt at graduation may have adverse effects on both students and governments if large numbers of students are unable to repay their loans (OECD, 2014[5]). A large share of indebted graduates could be a problem if their employment prospects are not sufficient to guarantee their student loan repayments.
OECD governments support national students’ living and education costs through different combinations of these two types of support – and the combinations vary even among countries with similar levels of tuition fees. The cross-country variation is significant, for instance, among countries with high annual average tuition fees for bachelor’s and master’s degrees in public institutions (around USD 4 000 and over). In England (United Kingdom), more than 90% of students only receive loans (rather than scholarships or grants) to cover the cost of tertiary studies. In the United States, 44% of students benefit from both loans and scholarships or grants, 33% from scholarships/grants alone and 9% from loans alone. In Australia and New Zealand, most students receive either loans alone or both loans and scholarships or grants (Figure C5.4).
In countries with available data where public institutions charge no tuition fees at the bachelor’s and master’s level, most national students receive financial support in the form of both loans and scholarships or grants, in order to cover their living costs. This is true for at least 50% of students in Finland, Norway and Sweden. In contrast, in Denmark, most students receive financial support in the form of scholarships or grants alone (62%), and only 23% receive both loans and scholarships or grants (Table C5.2).
Finally, in OECD countries and other participants such as Austria, the French Community of Belgium, France, Italy, Spain and Switzerland, where annual average tuition fees for tertiary are below USD 3 000, less than 45% of students receive any form of financial support – and those who do tend to receive it only in the form of grants or scholarships (Table C5.2).
The amount of money received or borrowed also varies substantially across countries. Among OECD countries and other participants with data available, the average amount of public or government-guaranteed private loans that tertiary students borrow each year ranges from USD 2 900 per student in Latvia to over USD 11 900 in England (United Kingdom) and Norway (where tuition is free of charge and loans finance students’ living costs). Scholarships or grants received by students range from USD 1 500 per year in the French Community of Belgium to over USD 7 000 in Australia, Austria, Denmark, Italy, New Zealand and Switzerland. However, these figures should be interpreted with some caution as they cover different reference years among countries (Table C5.2 and Table C5.3).
Interestingly, the average amount of scholarships or grants received by tertiary students exceeds the average tuition fees charged by public institutions in 60% of the countries for which data are available. In these countries, scholarships and grants are generous and can also fund students' living expenses. In the remaining eight countries, the amount received is insufficient to cover the annual tuition fee charged for a master’s programme. For example, they cover 18% of the average annual master's fee in the United States, 40-65% in Canada, Chile, Latvia and Lithuania, and 70-80% in Australia and Japan. In these countries, students who receive scholarships or grants may also need to borrow money in the form of student loans to finance their studies if they do not have the financial capacity to pay by themselves (Table C5.2 and Table C5.3).
Eligibility criteria for public support
Eligibility criteria for public grants or scholarships also differ from country to country. Means-tested grants, awarded on the basis of financial need, are the most common system and are in place in more than two-thirds of the countries for which data are available, although about half of countries offer merit-based scholarships (i.e. awarded on the basis of academic, athletic, or artistic merit) and more than one-third of them target scholarships based on the socio-economic status of students' families. Scholarships can operate simultaneously, so 10 of the 26 countries with data award both merit-based and means-tested scholarships. In contrast, universal scholarship systems (i.e. available to all new entrants to tertiary education) are rare and provided in only six countries: four Nordic countries (Denmark, Finland, Norway and Sweden) where no tuition fees are charged, Lithuania and the Netherlands (Table C5.2).
In 2020, students enrolled in part-time programmes and online or blended programmes (i.e. combining both online and campus-based instruction) at tertiary level are also theoretically eligible for scholarships or grants in more than two-thirds of the OECD countries and other participants for which data are available, although at that time blended and fully online programmes were still relatively rare. For example, only England (United Kingdom), France, Ireland, and Lithuania do not provide grants to students enrolled in blended programmes. In a number of countries, responses on online and blended programmes represent data from before the COVID-19 pandemic started. It will be important to monitor these trends in the future as these learning options become more common, in many cases accelerated by the COVID-19 pandemic.
Student loans show greater homogeneity in their eligibility criteria. In all countries with data available, loans can be used for tuition fees, study materials and living costs, except in Chile where loans only cover tuition fees and in Finland and Sweden where they only cover living expenses. Not all students are eligible to apply for student loans (Table C5.3).
Types of loan systems, interest rates, repayments and debt at graduation
Students often benefit from special conditions on their public loans or on private loans guaranteed by the government, for example in interest rates, repayment systems or remission/forgiveness mechanisms (Table C5.3). Governments often introduce these special conditions to reduce the cost of loans to students and, in the case of income-contingent loans, to protect them from the uncertainty of the labour market after graduating. By doing so, governments take on a considerable part of the cost themselves and bear the risk of lending to students, who can then access capital at a below-market cost.
As the structure of interest rates offered to students, for both public and private loans, differs to some extent across countries, cross-country comparisons of interest rates offered on public loans must be treated with caution. Governments use a variety of strategies to reduce the financial burden on students, including reduced interest rates before and/or after the end of studies. Some countries charge no interest at all on loans, while others link the interest rate to indices which are below market rates, such as the cost of government borrowing or an inflation index. In most counties, graduates may incur an interest charge related to the cost of government borrowing or even higher, although interest rates are usually still relatively low (Table C5.3).
There are two main types of student loans: fixed-repayment loans and income-contingent loans. In a fixed-repayment loan system, students are obliged to repay the loan within a fixed period, regardless of their financial situation after their studies. This may impose a heavy financial burden on graduates (or those who did not graduate) with low incomes. In contrast, in income-contingent loan systems, repayment is conditional on the borrower’s income reaching a threshold, and includes debt forgiveness after a certain period of time. This type of repayment arrangement is considered to be more equitable, as it takes into account graduates’ ability to repay their loan.
Both systems imply some costs for the government that guarantees the loan repayment. However, the potential financial burden for the government is more uncertain with income-contingent loans, as these depend on graduates’ ability to find work and earn an income above the minimum threshold for reimbursement.
Several countries have introduced income-contingent loans in recent years. For example, the United Kingdom replaced its fixed-repayment system with an income-contingent loan system in 1999 – and nowadays as much as 53% of student loans are not repaid. With the increase in student debt, some income-contingent loan systems were also introduced in the United States: the income-based repayment programme in 2009 and the Pay-As-You-Earn (PAYE) plan in 2012 (Table C5.3 and (OECD, 2015[6]).
Among the 17 countries and other participants with available data, Australia, Chile, England (United Kingdom), Germany, the Netherlands, and New Zealand have adopted income-contingent loan systems. Japan, Korea and the United States have a hybrid system, which includes both income-contingent and fixed-repayment loans. All of these countries, except the Netherlands, have annual tuition fees for master's programmes that exceed USD 5 000, which in part explains why they have set up a system of aid to students that allows them to continue their studies while limiting the risk entailed in having a debt at the end of their studies that they can never repay. The remaining nine countries have adopted a fixed-repayment loan system. Students face greater pressure, as they have to repay their loans within a fixed period, but the tuition fees in all countries in this group, except Lithuania, are low or non-existent (Table C5.3).
The debt burden that students accumulate is one factor that may affect individuals’ decisions to invest in tertiary education. The extent to which debt can be an issue for graduates mostly depends on the amount borrowed and the underlying loan conditions compared to graduates’ labour-market prospects, in terms of earnings and uncertainty of employment. Among the OECD countries and other participants with high tuition fees, at least 70% of students in Australia, England (United Kingdom) and New Zealand are in debt at graduation as a result of taking out loans. However, the average amount of debt at graduation varies significantly, from USD 19 800 in Australia and USD 26 200 in New Zealand to over USD 58 500 in England (United Kingdom). In countries where tertiary studies incur no or low tuition fees, debt at graduation would typically be lower than in countries with high tuition fees, since student loans are mainly only needed to cover students’ living expenses. However, in Nordic countries, where there are low or no tuition fees, the level of student debt at graduation may still be high because living expenses are high. This is the case for instance in Norway, where students’ average debt amounts to over USD 31 700 (Table C5.3).
Tuition fees – the money that students pay to higher education institutions for their instruction and other services – are fundamental revenue sources for educational institutions, alongside public spending from governments and other public bodies. The relative shares of public and private contributions for higher education vary widely across countries; in most countries governments assume the majority share of the education cost, but in other cases governments only subsidise the cost of higher education to a limited extent. However, regardless of how expenditure is apportioned between public and private sources, in a majority of cases across OECD jurisdictions the level of tuition fees set by institutions is subject to government-imposed limits (Figure C5.5).
In most countries, some tuition fees are charged, although the amount varies substantially. In general, institutions have somewhat more freedom to set their own fees at the master’s level than for bachelor’s or short-cycle tertiary programmes. Institutions also have more freedom to charge fees for specific activities or particular types of programmes. For example, they may be allowed to charge fees for student services or to meet particular administrative costs. Thus, the extent to which students contribute to the costs of higher education provision depends on many factors, which may include their own status, the legal status of the higher education institution they are attending and the type of programme in which they are enrolled.
Note: Total jurisdictions responding: 27 for master’s and bachelor’s programmes, 19 for short-cycle programmes.
Source: OECD Higher Education Policy Survey on Resourcing Higher Education. Working Papers, No. 259, OECD Publishing, Paris, https://doi.org/10.1787/0ac1fbad-en.
Source: Golden, Troy and Weko (2021[7]), “How are higher education systems in OECD countries resourced?”, https://doi.org/10.1787/0ac1fbad-en.
In this chapter, national students are defined as the citizens of a country who are studying within that country. Foreign students are those who are not citizens of the country in which the data are collected. While pragmatic and operational, this classification is inappropriate for capturing student mobility because of differing national policies regarding the naturalisation of immigrants. For EU and EEA countries, citizens from other EU countries usually pay the same fees as national students. In these cases, foreign students refer to students who are citizens of countries outside the EU. Further details on these definitions are available in Indicator B6.
Private institutions are those controlled and managed by a non-governmental organisation (e.g. a church, a trade union or business enterprise, foreign or international agency), or whose governing board consists mostly of members not selected by a public agency. Private institutions are considered government-dependent if they receive more than 50% of their core funding from government agencies or if their teaching personnel are paid by a government agency. Independent private institutions receive less than 50% of their core funding from government agencies and their teaching personnel are not paid by a government agency. In the OECD definitions, independent private institutions do not refer exclusively to for-profit institutions, some of then are not-for-profit institutions.Tuition fee amounts refer to gross tuition fees charged by institutions, before grants, scholarships and tuition waivers are applied.
Tuition fees and loan amounts in national currencies are converted into equivalent USD by dividing the national currency by the purchasing power parity (PPP) index for gross domestic product. The amounts of tuition fees and associated proportions of students should be interpreted with caution, as they represent the weighted averages of the main tertiary programmes and may not cover all educational institutions.
Student loans include the full range of student loans extended or guaranteed by governments, in order to provide information on the level of support received by students. The gross amount of loans provides an appropriate measure of the financial aid to current participants in education. Interest payments and repayments of principal by borrowers should be taken into account when assessing the net cost of student loans to public and private lenders. In most countries, loan repayments do not flow to education authorities, and the money is not available to them to cover other expenditure on education.
OECD indicators take the full amount of scholarships/grants and loans (gross) into account when discussing financial aid to current students. Some OECD countries have difficulty quantifying the amount of loans to students. Therefore, data on student loans should also be treated with caution.
For more information, please see the OECD Handbook for Internationally Comparative Education Statistics (OECD, 2018[8]) and Annex 3 for country-specific notes (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf).
Data refer to the academic year 2019/20 and are based on a special survey administered by the OECD in 2021 (for details, see Annex 3 at (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf).
References
[4] Cattaneo, M. et al. (2020), “Analysing policies to increase graduate population: Do tuition fees matter?”, European Journal of Higher Education, Vol. 10/1, pp. 10-27, https://doi.org/10.1080/21568235.2019.1694422.
[7] Golden, G., L. Troy and T. Weko (2021), “How are higher education systems in OECD countries resourced?: Evidence from an OECD Policy Survey”, OECD Education Working Papers, No. 259, OECD Publishing, Paris, https://doi.org/10.1787/0ac1fbad-en.
[3] OECD (2021), “How does earnings advantage from tertiary education vary by field of study?”, Education Indicators in Focus, No. 77, OECD Publishing, Paris, https://doi.org/10.1787/8a4b8f7a-en.
[1] OECD (2019), Education at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/f8d7880d-en.
[8] OECD (2018), Handbook for Internationally Comparative Education Statistics: Concepts, Standards, Definitions and Classifications, OECD Publishing, Paris, https://doi.org/10.1787/9789264304444-en.
[2] OECD (2017), Education at a Glance 2017: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2017-en.
[6] OECD (2015), Education at a Glance 2015: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2015-en.
[5] OECD (2014), Education at a Glance 2014: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2014-en.
Cut-off date for the data: 17 June 2022. Any updates on data can be found on line at: https://doi.org/10.1787/eag-data-en. More breakdowns can also be found at http://stats.oecd.org, Education at a Glance Database.
Table C5.1. Annual tuition fees charged by tertiary institutions to national and foreign students (2009/10 and 2019/20) |
|---|
In equivalent USD converted using PPPs, for full-time students, by type of institution and level of education |
 |
 |
Note: See Definitions and Methodology sections for more information. |
1. Reference year: calendar year 2018 for Australia and Germany; 2019 for Chile, Israel, Korea and New Zealand; academic year 2018/19 for England (UK), Estonia, Spain and the United States; 2020/21 for Finland and Ireland. |
2. Government-dependent and independent private institutions are combined. |
3. No tuition fees for full-time students enrolled in public institutions in programmes with curricula in Estonian. Differentiation for foreign students is based on the language of programmes' curricula. |
4. Government-dependent private institutions instead of independent private institutions. |
5. Government-dependent private institutions instead of public institutions. |
6. Master's programmes includes doctoral programmes. Tuition fees for foreign students typically refer to tuition fees for out-of-state national students. However, in a minority of institutions, tuition fees can be lower for out-of-state national students. |
7. Public and government-dependent private institutions combined. |
Source: OECD (2022). See Source section for more information and Annex 3 for notes (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf). Please refer to the Reader's Guide for information concerning symbols for missing data and abbreviations. |
Table C5.2. Variation in public financial support over time and eligibility criteria for public grants or scholarships for national tertiary students enrolled in public and private educational institutions (2009/10 and 2019/20) |
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 |
Note: See Definitions and Methodology sections for more information. |
1. Reference year: calendar year 2018 for Australia, 2019 for Chile, Korea and New Zealand; academic year 2015/16 for Germany and the United States; academic year 2018/19 for England (UK), Estonia, France and Spain; 2020/21 for Ireland. |
2. Reference year for trends: calendar year 2008 for Australia and Germany; 2009 for Korea and New Zealand; 2010 for Chile; academic year 2007/08 for the United States; academic year 2008/09 for the Flemish Community of Belgium; calendar year 2014 for Lithuania. |
3. Data do not refer to students receiving public financial support (BAföG) but to those eligible to apply for it. |
4. Government-dependent private institutions instead of public institutions. |
Source: OECD (2022). See Source section for more information and Annex 3 for notes (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf). Please refer to the Reader's Guide for information concerning symbols for missing data and abbreviations. |
Table C5.3. Availability, repayment and remission of public and government-guaranteed private loans to full-time and part-time national students in tertiary education (2019/20) |
|---|
 |
 |
Note: Data refer to calendar year 2018 for Australia; 2019 for Chile, Korea and New Zealand; academic year 2015/16 for Germany and the United States; academic year 2018/19 for England (UK) and Estonia. Please see Annex 3 for details. See Definitions and Methodology sections for more information. |
1. Information on debt, repayment and remission refer to government-guaranteed private loans instead of public loans. |
2. Data do not refer to students receiving public financial support (BAföG) but to those eligible to apply for it. |
3. The two types of repayment are: fixed payment (depending on the total amount of loan and numbers of repayment times) and income-contingent payment (depending on students' incomes in the previous year). |
4. Information on loans and debt at graduation refers to short-cycle tertiary and bachelor's degrees only. Average annual gross amount of loan borrowed by national students includes full-time students only. |
5. The share of students who benefit from a loan and the average annual amount of loan are for short-cycle tertiary, bachelor's and long-cycle master's degrees. |
Source: OECD (2022). See Source section for more information and Annex 3 for notes (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf). Please refer to the Reader's Guide for information concerning symbols for missing data and abbreviations. |