The Global State of Higher Education and the Rise of Private Finance (GCPF/IHEP)

            Because I discussed the mission and history of the Institute for Higher Education Policy in a previous post, I will not do so again here.  However, I will take a moment to discuss the Global Center on Private Financing of Higher Education (GCPF), a branch of IHEP that is credited with producing the report described below.  The GCPF was established in 2006 to identify “global solutions to address growing concerns about paying for postsecondary education” (“Global Center on Private Financing of Higher Education,” 2008, para. 1).  In addition to performing research on higher education finance strategies, the center also houses all of IHEP’s data on private funding tools and strategies.  Below I discuss a report produced by the GCPF that is based on that data.  

            In the same manner as the previous report I offered by the Institute for Higher Education Policy, The Global State of Higher Education and the Rise of Private Finance by Ryan Hahn discusses the complex issue of how students pay for college.  The report was written in 2007 and was produced by the Global Center on Private Financing of Higher Education.  I felt the report was of great interest because it is talking about the growing popularity of private funding, including larger family contributions, business loans and investments, etc.  However, as we all know, there have been recent developments in the student loans industry in America in which legislation has been passed that severely limits the importance and involvement of private lenders and sources.  This made the opening statements of the report all the more interesting.  Hahn (2007) mentioned briefly how governments around the world have been unable to keep up with demands and rising costs of education.  As a result, many nations turn to private sources of funding to close existing gaps.  He states, “a combination of increased per unit costs and higher enrollments has driven up costs, straining government resources to their limit” (Hahn, 2007, p. 3).  Throughout the article, the author examines data from around the world to discuss current finance structures, the growing demand for higher education, how to take advantage of private funding, innovations in private finance strategies, and the future of private finance.  As an example of innovations in private finance strategies, the article points to MIT’s “university-industry collaborations” as a means for the university to support itself through technology development and patent income (Hahn, 2007, p. 14).  Other strategies include philanthropy, securitization, human capital contracts, and foreign direct investment.  The final strategy I thought was particularly interesting.  Foreign direct investment is the process in which colleges and universities invest in overseas campuses to reach a broader group of students which increases revenue.

            Hahn concludes the report discussing the importance of private finance strategies and their role in promoting equity and expanding access to current and potential students throughout the world (Hahn, 2007).  This report discusses the many nations, whose governments burden the responsibility of higher education finance, that are now turning to private finance options due to strained budgets.  Isn’t it interesting how the United States has in the past three years attempted to take on more responsibility in financing higher education while the rest of the world is trying to find alternatives to it?

            Because Hahn is a member of an organization dedicated to promoting and preserving private funding sources, it is understandable that his (and the GCPF’s) viewpoints are bias.  However, that is not to say that they are not valid.

References

Global Center on Private Financing of Higher Education. (2008). Retrieved October 19, 2011, from http://www.ihep.org/Research/gcpf.cfm

Institute for Higher Education Policy, Global Center on Private Financing of Higher Education. (2007, August). The Global State of Higher Education and the Rise of Private Finance (Issue Brief No. 08070000-GCPF). Washington, D.C: Ryan Hahn