How the world pays for college—and what they get
In the United States, a K-through-12 education is free for every child. But we don’t extend that right to college students. Paying for higher education is a huge challenge for millions of American families, most of whom borrow money to afford it. We owe more in student loans than we do on our cars or our credit cards.
Look abroad, and you’ll find many different higher education systems, most of them placing a much smaller debt burden on students. According to a report released by the Organization for Economic Cooperation and Development (OECD) last year, a third of the 28 developed countries it gathered data for offer free college. And the only country that charges more for tuition than the U.S. is the United Kingdom.
So how exactly does college work in other countries? How do students pay for it, how good is it, and who gets to go? Here’s a round-the-world tour of higher ed, comparing the U.S. with five other nations: the United Kingdom, Canada, Australia, Brazil, and China. (All costs have been converted to U.S. dollars.)
The system: The U.S. higher education system consists of both public and private schools, for-profit and not. It is diverse, decentralized, and vast. Only China’s is larger.
- Number of schools that grant a four-year degree: 3,000
- Public institutions: 700
- Private institutions: 2,300 (1,600 nonprofit, 700 for-profit)
- Portion of population with a bachelor’s or equivalent: 33.4% of those 25 or older
- Quality: The British publication Times Higher Education names 17 American universities among the world’s top 25. Of those, 14 are private. However, fewer than 1% of U.S. students matriculate at the most selective private colleges (those that accept fewer than 10% of applicants). Most attend nonselective public institutions that accept the majority of applicants. A recent comparison by the OECD found that U.S. degree-holders under 35 lagged behind more than a dozen other countries in math and digital problem-solving skills, and behind half a dozen countries in reading.
The cost: The American higher education system is among the most expensive in the world, in part because of the costs of room and board and college amenities (like sports), which dwarf those in most other developed countries. Americans collectively carry nearly $1.5 trillion in student loan debt.
- How much per year: Tuition alone at a four-year public university averages more than $10,000 for in-state students. Add in the cost of room and board, and the total is more than $21,000. At private colleges, tuitions average more than three times that, and with room and board included, the annual price tag approaches $50,000.
- Paying for it: Even with federal Pell Grant awards flatlining, the education grants in the United States are among the world’s most generous. About 85% of full-time undergrad students get either grants or low-interest federal loans—an average of nearly $15,000 in total financial aid per year per student. Yet this financial aid system is both hero and villain, offering generous aid to many while being so opaque and complex that many families have trouble navigating it.
- Debt: About two-thirds of students graduate with debt; on average, they leave school owing around $30,000. More than one in 10 default on federal loans within three years of beginning repayment.
Who benefits: America’s sprawling higher ed system encompasses a wide cross-section of institutions, from some of the top universities in the world to for-profit diploma mills that leave students with a subpar education and heaping debt. The result is a bifurcated system that’s often divided along racial and socioeconomic lines, with whites attending top colleges and Hispanic and black students being funneled into open-access colleges. Wealthy students are four times more likely than poor students to get a diploma.
The system: The vast majority of the U.K.’s universities are in England, and almost all of them are public. Unlike in the U.S., “college” in the United Kingdom—comprising England, Northern Ireland, Scotland, and Wales—is where many students go after completing compulsory schooling at age 16. They then spend two years in college to prepare for exams to get into university (“uni”), or else to get vocational training. A university degree is typically earned in three years, not four, and students must choose their course of study when they apply.
- Number of universities: 160
- Portion of population with a bachelor’s or equivalent: 38.4% of working-age population (16 to 64)
- Quality: The U.K.’s universities include Oxford and Cambridge, the globe’s top two universities according to Times Higher Education. Traditionally, U.K. universities have enjoyed the admiration of the world and attracted top international students. However, a recent survey by the Office for Students, which monitors the quality of England’s higher ed institutions, found that only 38% of students feel they are getting good value for their tuition—in large part because a university education is so expensive. With the U.K.’s anticipated Brexit from the European Union, some fear that its universities will lose some of their global edge.
The cost: Until 1998, England offered its students free college. Since then, a series of reforms have increased tuition costs to among the highest in the world.
- How much per year: Students in England pay $12,000 in tuition alone. Other U.K. countries have different policies. For example, Scottish students who attend Scottish universities pay nothing.
- Paying for it: 79% of students take out loans.
- Debt: Unlike in the U.S., students don’t have to pony up any money up front—they pay all their college expenses after graduation. Students graduate owing an average of around $55,000 in student loans, nearly twice the average for grads who borrow to attend college in the U.S. However, the government sets interest rates at reasonable levels according to how much a grad earns, payments are collected through payroll taxes, and loans are forgiven after 30 years. The government expects that only 30% of undergrads will repay their loans in full.
Who benefits: Despite the high cost, research shows that the accessibility gap between advantaged and disadvantaged students has narrowed, more students than ever attend university in the U.K., and the funding per student has risen in the past decade.
The system: Generally, Canada’s universities are public, though there are a handful of private schools, most of them religiously affiliated. The system is decentralized, with each of the country’s 10 provinces and three territories managing its own institutions. Degree programs take between three and four years to complete.
- Number of universities: 95
- Portion of population with a bachelor’s or equivalent: 28.5% of working-age population (25 to 64)
- Quality: Canada’s universities include some of the best in the world, and, compared to the U.S., where quality is all over the map, standards are uniformly high. Canada’s generosity with student visas attracts diploma seekers from around the world, particularly from the U.S.
The cost: Compared to many other countries, the cost of a Canadian education is low, and the value of that education is high. Still, the affordability of a Canadian university degree is a perennial political talking point—with many arguing that college is still too expensive and financial aid not as generous as advertised.
- How much per year: Domestic students pay an average of $5,000, plus another $700 in fees.
- Paying for it: Canadian students are eligible for generous financial aid. For example, students in the province of Ontario whose families make less than $40,000 qualify for free tuition. Less than half of students finance their education with loans.
- Debt: Student borrowers graduate with an average of $10,000 in debt. Similar to the U.S., one in 10 borrowers default within three years of entering repayment.
Who benefits: Canada does a better job than many other countries of offering higher education access to its people, but inequity is still an issue. A university education continues to be easier to obtain for upper- and middle-class families. Canada is struggling to close an education gap for its indigenous population, though its universities have made a concerted effort in recent years to recruit more indigenous students.
The system: Most Australian universities are public. A whopping 431,000 students—nearly 30% of the total—come from overseas, placing it behind only the U.S, the U.K., and China for the share of foreign enrollees, despite its smaller size.
- Number of universities: 43
- Portion of population with a bachelor’s or equivalent: 31.4% of working-age population (20 to 64)
- Quality: In general, the country’s universities are highly regarded, and several consistently rank among the top 100 in the world, hence its large international student contingent. But with recent government funding cuts, some experts say the quality of Australian universities is slipping. Critics also fear that efforts to woo revenue-generating international students are diluting university standards.
The cost: In 1974, the government abolished tuition, but demand for university spots was so high that just 15 years later, the Commonwealth introduced a new system that requires a student contribution.
- How much per year: $8,300 in tuition, depending on the course of study.
- Paying for it: 85% to 90% of students pay for their portion of education fees with a loan that indexes to inflation. As in the U.K., payments are collected through the tax system according to a graduate’s income, so those who make less pay less.
- Debt: Borrowers take out an average of $23,500. A significant difference between Australia and the U.K. is that Australians can’t take out loans to cover living expenses.
Who benefits: The government offers partially subsidized university slots called Commonwealth-supported places (CSPs), in which the government and the student split higher education costs. In 2012, enrollment shot up after the government removed its cap on CSPs to meet increasing demand for college access. Recently, the government proposed limiting the number of CSPs to save the government money, continuing Australia’s back-and-forth history with subsidizing higher ed for its citizens.
The system: Brazil has one of the largest private education systems in the world. For-profit colleges, which flourished here before gaining traction in the U.S., enroll the majority of students. But the best universities—including the University of São Paulo, one of the top schools in Latin America—are the public ones, and tuition there is free. Consequently, competition is fierce. Only 28% of college students attend public universities.
- Number of universities: 2,400
- Public institutions: 300
- Private institutions: 2,100
- Portion of population with a bachelor’s or equivalent: 15% of working-age population (25 to 64)
- Quality: Though many of Brazil’s public universities are internationally acclaimed, the explosion in higher education in Brazil has resulted in the proliferation of private institutions of questionable quality, with many catering to lower-income students.
The cost: The majority of students get their degrees at private universities—where for-profit giants like Kroton Educacional dominate. These institutions administer degree programs that cost less than what the government spends on the average public university education, but their graduates earn less upon graduation.
- How much per year: Brazil’s public universities are free. The range for private university tuitions is wide. They can run from $2,000 to more than $10,000 annually.
- Paying for it: Students who don’t get into public universities can apply for government grants or government-subsidized loans to attend private institutions. Government loans with a near-zero interest rate help students pay for college, but these programs have recently been curtailed, forcing borrowers into the arms of commercial banks that charge high interest rates.
- Debt: Public figures for the country’s relatively new student loan system are scarce, but the government estimates 30% of federal borrowers have defaulted.
Who benefits: From 2002 to 2012, the number of students attending university doubled, to seven million. People with a college degree get a huge income bump, earning 2.5 times more than those without one—a significantly higher increase than in any other OECD country. But the current education system perpetuates sharp class inequality. For example, the main qualification for public university entry is the country’s SAT-style entrance test, the Vestibular exams, rather than high school performance. Those who have the resources to prepare for it (they skew rich and white) generally snag the public university seats. The election of right-wing president Jair Bolsonaro could endanger higher education funding and affirmative action policies.
The system: The country’s effort to rival other world superpowers is reflected in investments in higher education. Twenty years ago, fewer than 3.5 million students attended Chinese universities. Today, the total approaches 30 million. In addition, many students study abroad. Chinese students make up a third of all international students studying in the U.S., for example. College-bound Chinese students must study for years to sit for the grueling gao kao, the exam that essentially determines their college prospects.
- Number of public universities and vocational colleges: 2,631
- Private institutions: 800
- Portion of population with a bachelor’s or equivalent: 3%
- Quality: The country has built hundreds of universities in recent years, and pushed to develop 42 “World-Class Universities” (WCUs) that particularly excel in scientific fields. Many universities have pursued foreign students to boost their international rankings, sometimes to the detriment of domestic students. For instance, international students aren’t always held to the same rigorous entrance requirements as China’s domestic students.
The cost: Many working-class Chinese devote their lives and their savings to preparing for the gao kao and sending their children to university, though a college degree is no guarantee of lucrative employment.
- How much per year: $600 to $2,000 in tuition, depending on course of study
- Who pays: While financial aid is available, research has found that a significant proportion of disadvantaged students do not seem to receive any type of aid.
- Debt: Student loans are virtually nonexistent, in part because they are hard to come by. Recently, after usurious online lenders sprang up to fill the void, China banned them amid reports that some were demanding nude photos from young women as collateral.
Who benefits: China’s education system perpetuates extreme inequality; 95% of students from rural areas drop out of the education system before even sitting for the gao kao. Among the many factors conspire to perpetuate this chasm: poorly funded rural primary schools, the cost of high school (which isn’t free) and tutors, a residency requirement that bars rural families who move to the city from enrolling their kids in good urban schools, and university admissions quotas that vastly favor (richer) urban students.