Funding higher education has increasingly become a paradox for many nation states. The paradox rests with the recognition that the nation state acknowledges that university education has long-term benefits for the state with a better educated society, an increased opportunity to provide an innovative, creative and high technology work force for economic growth. Against this foil is the global austerity facing many countries, challenging the state to reduce the fiscal debt. The article seeks a "third way" through the paradox using a dialectic argument.