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ERIC Number: ED536172
Record Type: Non-Journal
Publication Date: 2008-Aug
Pages: 20
Abstractor: ERIC
Reference Count: N/A
ISBN: ISBN-978-1-8403-6188-9
Private Universities and Public Funding: Models and Business Plans. Policy Commentary
King, Roger
Universities UK
The growth of private higher education has come as a surprise to most governments, which have tried to catch up in their regulatory and funding policymaking. In China, Malaysia and South Africa they have given legal recognition to previously disallowed private higher education and this has helped to fuel its subsequent growth. Some governments encourage private higher education in order to help to meet the rising demand for higher-level qualifications, and also to provide their "public service" counterparts with further challenges to improve their market responsiveness and overall efficiency and effectiveness. Such private entities tend to be highly reliant on income from tuition fees and similar student charges for their business models and lack the capability or funds to engage in research, a function increasingly confined in most countries (other than the United States) to well-established public universities. In the United States, reliance on tuition fee income and other student charges has led to persistent violations by for-profit providers, such as paying admissions tutors a commission to enrol students who have little or no ability to benefit from the education provided. This has led to a toughening of federal rules. In the United States, private institutions include some of the longest-established and most prestigious universities, such as Harvard, Stanford and Yale, and this is also the picture in Japan and Chile. They possess large research and endowment funds and do not depend on tuition fees as their only or primary source of income. Long-established private universities of this kind have been rarely "for-profit", at least in a formal sense. Government regulation usually requires them to adopt a charitable-like "non-profit" structure in order to obtain tax advantages, even if they are business-like and quite commercial in their operations. These not-for-profit institutions cannot be organised to benefit private interests, their assets must be permanently dedicated to charitable purposes, and net earnings cannot be distributed to owners or shareholders. While international expansion of private higher education is occurring, most such provision is local, not least because local regulation and control remain significant barriers to such growth, even where individual countries' regulatory environment becomes more favourable. This paper explores different categories of private providers and their characteristics: not-for-profit private higher education institutions and for-profit institutions, including various types of for-profit institutions. (Contains 8 endnotes.)
Universities UK. Woburn House, 20 Tavistock Square, London, WC1H 9HQ, UK. Tel: +44-20-7419-4111; Fax: +44-20-7388-8649; e-mail:; Web site:
Publication Type: Reports - Evaluative
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Universities UK (England)
Identifiers - Location: Africa; Asia; Australia; Belgium; Chile; China; Japan; Malaysia; Netherlands; New Zealand; South Africa; United Kingdom; United States