Cost-sharing as a policy in Ethiopian higher education institutions (HEIs) has been adopted since 2003 to achieve a set of objectives such as supplementing revenue as an alternative non-governmental source, maintaining and enhancing access to higher education, addressing equity in terms of opportunity in higher education and making students "customer-like". This article tries to identify some of the basic challenges the government is facing in achieving the objectives of cost-sharing in general. These challenges are lack of policy awareness, limited (or lack of) immediate non-governmental revenue, difficulty in implementing the concept of students-as-customers, the huge amount of government subsidy, inefficient/weak collection capacity, high default rate, and there is no direct flow of money to HEIs from cost-sharing.