The chapter examines where higher education institutions in OECD countries obtain their income, how income streams vary between different types of institutions and trends in the revenue mix of institutions in different countries over the last decade. The chapter concludes by considering the extent to which further diversification of income sources offers a realistic option for increasing the financial sustainability of higher education institutions.
The Financial Sustainability of Higher Education
Insights from Policy in OECD Countries
Abstract
On average, over four-fifths of tertiary students in OECD countries are enrolled in publicly funded tertiary education institutions.
Public money accounted on average for almost three-quarters (73%) of spending on public and publicly funded institutions in OECD member and accession countries in 2022 and over 80% of spending in 20 of the 38 countries with available data. The international measure of expenditure on institutions (seen from a system perspective) broadly equates to the revenue institutions generate (seen from an institutional perspective).
Historical approaches to tuition fees in higher education, explicit government policies to change the balance of cost sharing between government and students and their families, the scale of enrolment by international students and related fee policies, and traditions and policies related to private investment in higher education are the four main factors influencing the mix of public and private spending on tertiary education institutions across systems.
In systems where formalised institutional sub-sectors exist, universities systematically attract higher levels of third-party funding than professionally oriented institutions, reflecting the much higher levels of research activity in universities. Public and private funding for research explains much of the difference in per student income levels between universities and non-university institutions.
Recent trends have seen a decline in the share of expenditure from households (essentially student fees) on public and publicly funded tertiary education institutions in 21 of the 35 OECD member and accession countries with available data. In contrast, the share of expenditure from households increased by 10 percentage points or more in Canada, Mexico, Australia, Ireland and the United Kingdom.
Non-household private expenditure on HEIs remains comparatively limited and is subject to substantial fluctuation. It accounts for 15% of total expenditure on public and publicly funded tertiary education institutions but declined as a share of total expenditure over the last decade in almost half (15) of the 35 OECD member and accession countries with available data.
Income diversification remains a priority for higher education institutions in OECD countries that are seeking to improve their financial position, but recent analyses also highlight efficiency in resource use and improved strategic planning as essential to ensuring institutional activities are aligned with institutions’ revenue-generation capacity in the medium-to-long term.
Most tertiary students in OECD countries are enrolled in publicly funded institutions
Across the 37 OECD member countries with available data, an average of over four-fifths (81%) of students at tertiary level are enrolled in tertiary education institutions that are formally classified as public institutions, or which formally have private status but receive much of their funding from public sources (Figure 3.1). Government-dependent private tertiary education institutions are usually established as non-profit bodies, frequently with the status of charities or foundations. The remaining students are enrolled in independent private institutions, which typically receive little or no public subsidy. Such independent private institutions – which may be operated on a non-profit or for-profit basis – account for over one-quarter of total enrolment in nine of the 37 OECD member countries with available data, with the highest shares seen in Korea, Japan and Chile. As illustrated in Figure 3.1, OECD candidate accession countries Brazil and Peru enrol a substantially higher proportion of tertiary students in private, independent institutions than the average in OECD higher education systems.
Share of enrolment (persons) in tertiary education (ISCED 5-8) by type of institution, 2022
Note: (1) OECD figures are calculated as unweighted averages of the 37 OECD member countries with available data. (2) No data available for Costa Rica (which only submits data for public institutions to the UOE data collection).
Source: OECD (2025) Number of enrolled students and graduates by type of institution (dataset), https://data-explorer.oecd.org/s/334 (accessed on 17 July 2025).
The classification of institutions by status used in the joint collection of international education data by the United Nations Educational, Scientific and Cultural Organization (UNESCO) Institute for Statistics (UIS), the OECD and Eurostat – which is applied by the countries submitting the data – reveals some of the idiosyncrasies of certain OECD tertiary education systems. Institutions that are generally referred to in public discourse in the United Kingdom as “public” universities formally have the status of private entities, unlike their counterparts in most other OECD systems. In Belgium, the legacy of pillarisation (verzuiling) is evident, in that Catholic and liberal (vrijzinnig) universities and university colleges have the status of private entities, while other institutions are public (OECD, 2021[1]). In Finland, most universities are public entities, while universities of applied sciences have the status of non-profit limited liability companies. Reforms in Latvia and Hungary in recent years mean that public, government-dependent private and independent private institutions co-exist in the national tertiary education systems.
“Public” institutions often – but not always – obtain most of their income from public sources
As public funding and regulatory policies in OECD countries target the public and publicly funded (government-dependent) tertiary education sectors, the analysis in the remainder of this chapter focuses on these institutions. As shown in Figure 3.2, public money accounted on average for almost three-quarters (74%) of spending on public and publicly funded tertiary education institutions in the 38 OECD member and accession countries with available data in 2022. Public funds accounted for over 80% of spending on these institutions in 20 of the 38 countries and over 90% in Romania, Costa Rica, Iceland, Mexico, Norway and Austria. As shown in Figure 3.1, public institutions in Mexico account for around two-thirds of total enrolment in tertiary education, while public institutions enrol nearly all students in Iceland and Norway.
At the other end of the scale, public sources account for less than 60% of total expenditure on public and government-dependent tertiary education institutions in Israel, Ireland, the United Staes, Canada, Chile, Australia and the United Kingdom. The data for the United Kingdom and Australia in this respect must be interpreted with a degree of care as expenditure on tertiary education by households – in other words, by students and their families – in these systems includes payments made using government-backed, income-contingent student loans. Although these payments are correctly classified as private contributions to tertiary education, the immediate source of the payments is the public loan system and, in the longer term, a proportion of student loans will never be repaid. High rates of loan non-repayment, particularly in the United Kingdom, mean a proportion of spending recorded as private in the short term will become delayed public spending in the longer term (Bolton, 2020[2]).
Proportion of expenditure on public and government-dependent tertiary education institutions by source of funds, 2022
Note: (1) Countries are ranked in order to the share of expenditure that comes from government sources. (2) OECD figures are calculated as unweighted averages of the 33 OECD member countries with available data disaggregated by source of funds. Germany and Hungary are excluded from the average as they do not report data disaggregated for private sources. (3) No data available for Colombia, Japan and Switzerland. (4) The reference year for the United States is 2021.
Source: OECD (2025[3]), Full dataset - Indicators, source, destination and nature of expenditure on education (dataset), https://data-explorer.oecd.org/s/33m (accessed on 19 August 2025).
Public expenditure on tertiary education institutions in most countries comprises multiple funding streams, of which the largest share is typically provided through block grants paid directly to institutions (see the example of Ireland in Box 3.1). As discussed in Chapter 4, the design of these core grants varies substantially between OECD higher education systems, with key differences including whether core direct-grant funding is explicitly allocated for research and whether the allocation model relies on an indicator-driven formula or historical funding patterns. The other main source of public funding for institutions in many OECD higher education systems is competitive research funding, allocated by research funding councils. Other forms of public funding, such as grants from different public agencies or ministries, or targeted, project-based funding are significant in some systems, but typically account for a much smaller share of overall public spending on tertiary education institutions.
In addition to public spending and spending by households, the other two other categories of expenditure on tertiary education institutions captured in international education statistics are spending by private entities other than households – which encompasses spending by business and non-profit organisations and institutional income from commercial activities – and spending from international sources (the “rest of the world”), which cover payments from supra-national bodies. This latter category is most significant in European countries where European Union funds flow to tertiary education institutions through the Union’s competitive research funding programme Horizon, other centrally managed funds and structural funds managed at national and regional level in EU member states.
As shown in Figure 3.2, public sources account for around 56% of total expenditure on that country’s universities and universities of technology. The remaining expenditure comes from fees paid by domestic and international students (around 40% of total expenditure), businesses and non-profit entities in the form of research grants, donations or payments for services (around 1.5%) and income from the European Union and other international funds (around 2.5%). In practice, the composition of institutional revenue varies substantially between individual institutions. The public expenditure component comes from different revenue streams, of which the most important are:
Government payments to cover tuition fees (“free fees”) for eligible domestic and European Economic Area undergraduate students.
Block-grant funding from the state, distributed using a formula (see Chapter 4).
Competitive grants for research and innovation activity now awarded principally by Research Ireland, the national research and innovation council created in 2024 by amalgamating the previous activities of the Irish Research Council and the Science Foundation Ireland.
Targeted, usually project-based public funding for specific activities, such as the development of programmes for adult learners.
Source: OECD (2022[4]) Resourcing higher education in Ireland : Funding higher education institutions, https://doi.org/10.1787/67dd76e0-en.
The degree of reliance on public funding reflects historical developments and policy choices
The patterns of public and private expenditure on tertiary education institutions discussed above reflect four main factors:
1. Historical approaches to tuition fees in higher education. In some countries, such as the United States, both public and private higher education institutions, with some exceptions, have traditionally charged fees to domestic students. Public institutions have also tended to charge higher fees to students from outside the state where the institution is based. While the relative cost of these fees may have changed over time, they have consistently accounted for a substantial share of spending on institutions and thus, institutional revenue.
2. Specific government policies to change the balance of cost sharing between government and students and their families. Such policies have been implemented to different extents and in different directions in several OECD countries. Both Australia and the United Kingdom (and notably England) have introduced regulated tuition fees in the last 40 years (respectively, in 1989 and 1998) for the majority of domestic students who had not previously been required to pay fees. Ireland’s government decided to cover most of the costs of existing tuition fees in Irish higher education for domestic students in the mid-1990s, although the “student contribution” to the cost of fees subsequently increased to reach EUR 3 000 per year (OECD, 2022[4]). Portugal’s government reduced regulated fees in public higher education institutions in both 2019 and 2020, while the last of the German federal states abolished tuition fees for domestic students in 2014.
3. The scale of enrolment by international students and related public policies to regulate international student numbers. As highlighted in Chapter 2, international students are charged fees in some systems where domestic students are not and are often charged higher fees in systems where fees do exist for domestic students. Where international students make up a substantial share of the student population, as in Australia or the United Kingdom, the fees they pay increase total household expenditure on higher education in these systems. Conversely, when international students are numerous, but fees are modest or inexistent, as in Germany, international enrolment has limited impact on spending on – and revenue in – tertiary education institutions.
4. Traditions and policies related to private investment in higher education. As discussed below, spending by businesses and non-profit organisations, as donations, grants or contracts for specific services has been seen in many higher education systems as a means to diversify institutional income and complement core revenue from public funding and tuition fees. The scale of such spending varies substantially between countries.
The first three factors – all of which influence the scale of expenditure on tuition fees – have greatest impact on the scale of the household contributions to higher education shown in international data. Figure 3.3 presents the same data as Figure 3.2, but ordered by the share of spending on public and government-dependent tertiary education institutions that comes from household sources. The highest shares are in largely Anglophone countries and Latin America, with household spending accounting for half or more of total spending on public and government-dependent institutions in the United Kingdom, Australia and Chile and over one-quarter in Canada, New Zealand, the United States and Ireland. The high shares of household spending in the United Kingdom and Australia reflect a combination of high numbers of international students and comparatively high fees for domestic students. In the case of Chile, the pattern reflects comparatively high fees for domestic students and the legacy of the liberalisation of higher education in the 1980s. This pattern will likely change in future years as the more recent policy of “gratuidad” (“free fees”) for lower-income students is reflected in the data.
Proportion of expenditure on public and government-dependent tertiary education institutions by source of funds
Note: (1) Countries are ranked in order to the share of expenditure that comes from household sources (predominantly from student fees). (2) OECD figures are calculated as unweighted averages of the 33 OECD member countries with available data disaggregated by source of funds. Germany and Hungary are excluded from the average as they do not report data disaggregated for private sources. (3) No data available for Colombia, Japan and Switzerland. (4) The reference year for the United States is 2021.
Source: OECD (2025[3]), Full dataset - Indicators, source, destination and nature of expenditure on education (dataset), https://data-explorer.oecd.org/s/33m (accessed on 19 August 2025).
As noted in Chapter 2, the extent to which tertiary education institutions operate their own housing and catering services for students or the extent to which they engage in other ancillary activities such as provision of sporting facilities also has some impact on the composition of institutional spending and revenue. Similarly, the scale of continuous and adult learning provision in the higher education system can influence public and private revenue streams, depending on how such learning is financed in different countries.
Non-university institutions typically rely to a greater extent on public funding
Within individual higher education systems, the extent to which different institutions – or categories of institution – rely of different funding streams varies substantially. Drawing on data from the European Tertiary Education Register (ETER), Figure 3.4 illustrates total institutional revenue per full-time-equivalent student and the breakdown on institutional revenue by source for different categories of tertiary education institution in six European systems.
Revenue per FTE student disaggregated by source by higher education sub-sector, in euros converted for purchasing power parity, 2022
Note: (1) Student Full-Time Equivalent (FTE) estimates were derived using country-specific multipliers calculated from 2022 UOE data. In cases where part-time/full-time breakdowns were not reported (e.g. ISCED 8 in Belgium and the Netherlands; all levels in Denmark), all students were assumed to be full-time. (2) Only institutions with available data were included meaning data coverage varies by country and by institutional type. A total of 175 institutions are included across the six countries covered (Belgium, Denmark, Finland, Lithuania, Netherlands, and Portugal). (3) Ireland has not been included here because of limited availability of financial data for the Irish institutions included in ETER and changes to the binary system in Ireland since the last ETER data collection, which make comparison of sub-sectors less relevant. (4) Finland does not report third-party funding in a disaggregated form in the ETER database.
Source: European Commission / EACEA (2025[5]), The European Higher Education Sector Observatory - European Tertiary Education Register data collection (dataset), https://eter-project.com/data/data-for-download-and-visualisations/database/ (accessed on 25 August 2025).
Figure 3.4 shows the much higher levels of revenue per FTE student in universities compared to non-university institutions in all systems, mirroring the pattern seen in institutional expenditure per student presented in Chapter 2. Revenue per FTE student is at least double the level in universities as in universities of applied sciences – or their equivalents – in all countries shown, except Portugal.
Core government grants make up around 60% of institutional revenue in universities in the Netherlands, Denmark and the Flemish Community of Belgium, around 70% in Finland and Portugal, but only 45% in Lithuania. In contrast, core operating grants systematically represent a higher share of institutional revenue in universities of applied sciences or other non-university institutions: over 80% in the Netherlands, Denmark, the Flemish Community and Finland, 73% in Portugal and 66% in Lithuanian Colleges. This is despite the core grant allocations per student being lower in non-university institutions in all six countries.
As discussed in Chapter 4, the higher rates of the core government grant funding per student for universities, compared to universities of applied sciences, reflect differences in the design of the public funding models for the two institutional categories. The Netherlands, Denmark, the Flemish Community, Finland and Portugal, for example, all use distinct formula-based funding models for universities and non-university institutions, with generally higher funding rates for disciplines taught in universities than for disciplines taught in universities of applied sciences. The Netherlands, Denmark, the Flemish Community and Finland also provide – often substantially – higher rates of core public funding for research to universities than to universities of applied sciences. In Lithuania and Portugal, direct grants from research council, based on the results of research assessment exercises, and subsidies for researcher salaries also explain at least part of the higher core public funding rates per student for universities, compared to non-university institutions.
Even more significantly than the differences in core public funding grants between universities and non-university institutions are differences in the capacity of universities and non-universities to attract third-party funding. In all six systems, universities systematically attract substantially more third-party funding than non-university institutions. The ETER data collection distinguishes between “public third-party funding”, which encompasses project-based funding from public agencies, “private third-party funding” and “third-party funding from abroad.” These latter two categories correspond broadly to the expenditure by other private entities and from the rest of the world captured in the UOE data collection. The majority of third-party funding in most of the systems shown is related to research activity, with research councils and other funding agencies likely the source of most public third-party funding. The lower levels of third-party funding seen in Portugal largely reflect the distinct legal status of public research centres associated to higher education institutions, which means that a most third-party funding is included in the accounts of these centres, rather than in the accounts of higher education institutions.
Fee income varies between the systems shown, although tuition fees for domestic students are lower in these systems than in the English-speaking or Latin American OECD systems with the highest fee levels. The share of income from student fees varies from 18% in Lithuania’s colleges and 17% in polytechnic institutes in Portugal, 7.5% and 12% in Dutch universities and universities of applied sciences and 4.5% and 9% in Flemish universities and university colleges. Although domestic students do not pay tuition fees for in Finland, international students not studying in Finnish or Swedish (the two main national languages) have paid fees of at least EUR 1 500 per year since 2017 (OKM, 2022[6]). Income from these fees does not appear to be categorised separately in the ETER data collection.
Three main strategies for revenue diversification have been pursued in OECD countries
Particularly in contexts where the scope to increase public spending on higher education is limited, higher education leaders and policy makers in many OECD countries have looked to revenue diversification as a way to improve the financial situation and financial sustainability of higher education institutions (Bennetot Pruvot, Claeys-Kulik and Estermann, 2015[7]). This chapter has already illustrated that, while higher education institutions obtain revenue from multiple sources, it would be hard to conclude that the revenues of public or government-dependent HEIs in OECD countries are strongly diversified. The majority of HEIs in most OECD countries depend largely on public funds for their revenue. As highlighted earlier, despite variation across countries, public funds from core grants and project-based funding account on average for almost three-quarters (74%) of spending on public and government-dependent tertiary education institutions in OECD countries, with tuition fees from domestic and international students accounting for a further 15% on average. Only the remaining 11% of spending thus comes from the private and non-profit sectors and international funding bodies (see Figure 3.2).
The three main strategies for revenue diversification in the higher education sector in recent decades have been a) to raise a greater proportion of institutional revenue from tuition fees, either by raising fees or attracting categories of students, such as international students, who pay higher fees, b) to try to raise more revenue from third-party sources, particularly private, non-profit and international funders and c) to obtain funding from new public-sector funding sources.
As noted earlier, a small number of OECD countries have made a deliberate government policy to increase tuition fees and change the balance of cost sharing in higher education. In some countries with more liberal fee-regulation regimes – notably the United States – tuition fees have increased without this necessarily resulting from deliberate policy choices. Strategies to increase revenue from international students and from third-party funders are more typically driven by HEIs themselves, although sometimes with encouragement and support from public authorities. As illustrated by the institutional data in Figure 3.4 above, research universities generally have much greater capacity to bring in third-party funding than non-university institutions, primarily because third-party funding is commonly used for research or related activities in which universities have greater specialisation. The diversification of public funding streams primarily involves institutions seeking funding from government departments other than the ministries and agencies primarily responsible for higher education and research, as well as from sub-national governments. Efforts in some countries to boost adult learning through increased delivery of continuing education at higher education level provide an example of this, as funding may come from skills or adult education budget lines, rather than the core higher education budget.
The share of institutional income from student fees has declined in most OECD countries
Available data suggest that the first revenue-diversification strategy – raising tuition fees – can have the greatest impact on institutional revenue patterns, but that few OECD countries have followed this path in the last decade. Figure 3.5 (overleaf) illustrates, in Panel A, how the share of expenditure on public and government-dependent tertiary education institutions from public sources and from households – i.e. fees – changed between 2012 and 2022. On average, across OECD countries, there was virtually no change in the proportion of expenditure these institutions received from public sources and households. Moreover, the share of expenditure from households declined in 19 of the 34 OECD member and accession countries with available data and increased by more than two percentage points in only six countries (the United Kingdom, Ireland, Canada, Australia, Poland, and Italy).
The increases in the shares of expenditure by households on higher education in the United Kingdom (37%), Ireland (26%), Canada (10%) and Australia (9.5%) in the period captured by the data reflect a combination of domestic policy changes and increases in international student enrolment. 2012 marked the introduction of substantially higher student fees for newly enrolling domestic students in England, coming a year after an increase in the student contribution in Irish higher education to EUR 3 000 a year. These changes were accompanied by substantial real-terms cuts in public funding to the higher education sectors of both countries. The effects of the fee changes are reflected in the years immediately after 2012 as all enrolled domestic students moved to the new fees systems. The share of expenditure on HEIs from public funding expenditure in the United Kingdom and Ireland declined by over 30 percentage points between 2012 and 2022. In parallel, over the decade to 2022, the number of enrolled international students increased by 53% in Australia, 62% in the United Kingdom, 111% in Ireland and 123% in Canada (OECD, 2025[8]). The substantially higher fees paid by international students have brought in significant new revenue to – and influenced the overall revenue mix of – the higher education sectors in these four countries.
In Canada, 2016 was the first year since the early 1950s when income from non-government sources was larger than income from government sources. By 2022, the data reported to the OECD show 49.6% of expenditure on public tertiary education institutions coming from government sources (see Figure 3.5, Panel B), while Canadian data based on university and college income statements shows just 46.3% of total institutional income came from the federal and provincial governments. This has led some analysts to argue that post-secondary education in Canada, despite being mostly publicly owned, is “publicly aided, rather than publicly financed” (Usher and Balfour, 2024[9]).
Change in the share of public and household expenditure on public and government-dependent tertiary education institutions and public expenditure as a share of total expenditure.
Note: (1) OECD and EU25 figures are calculated as unweighted averages of the countries shown from the respective organisations with available data. (2) No data available for Japan, Korea, Peru, the Netherlands, and Switzerland. Germany and Hungary do not report household and other non-educational private sector values individually. (3) The reference year for Australia, Belgium, and Costa Rica is 2013. The reference year for the United States is 2021.
Source: OECD (2025[3]), Full dataset - Indicators, source, destination and nature of expenditure on education (dataset), https://data-explorer.oecd.org/s/337 (accessed on 21 October 2025).
Attempts to increase income from other private sources have had limited success
Public “third-party” funding to higher education institutions encompasses a wide range of funding by public bodies that does not form part of the core direct grants to institutions, which are discussed in Chapter 4. This includes grants made by public research funding agencies, grants given by public-sector bodies for specific projects or activities and public-sector contracts for services. As these forms of funding also come under pressure during periods of public-sector budgetary constraint, HEIs in OECD countries have also focused revenue-diversification efforts on bring in funding from the private and non-profit sectors.
Available international data suggest, however, that such revenue streams account for a comparatively small share of overall expenditure on tertiary education institutions in most OECD countries and their share in overall institutional revenue has declined over recent years in almost half (13) of the 33 OECD member and accession countries with available data. Figure 3.6 illustrates both the share of total revenue in public and publicly funded tertiary education institutions that comes from private sources other than households and the percentage-point change in this share over the decade to 2022. It shows that non-household private expenditure, by businesses and non-profit organisations, accounts for a share of at least 10% of total expenditure of tertiary education institutions in more than one-third (13) of the 33 countries included. The highest shares of expenditure from these sources are observed in Israel, Canada, the United Kingdom, the United States and France. The largest increases in the share of expenditure from non-household private sources – of over 5 percentage points – were seen in Türkiye, Denmark, Latvia, Israel, France and Poland. In contrast, countries including Portugal, Slovakia, Australia, the United Kingdom, Chile, Italy and Spain saw a fall in the share of expenditure coming from private sources.
Share of total spending on public and government-dependent tertiary education institutions from non-household private sources in 2022 and percentage-point change in this share between 2013 and 2022.
Note: (1) OECD and EU25 figures are calculated as unweighted averages of the countries shown from the respective organisations with available data. (2) No data available for Japan, Korea, Peru, Mexico, the Netherlands, and Switzerland. Germany and Hungary do not report household and other non-educational private sector values individually. (3) The reference year for Australia, Belgium, and Costa Rica is 2013. The reference year for the United States is 2021.
Source: OECD (2025[3]), Full dataset - Indicators, source, destination and nature of expenditure on education (dataset), https://data-explorer.oecd.org/s/337 (accessed on 21 October 2025).
The data in Figure 3.6 confirm the importance of expenditure from businesses and the non-profit sectors for higher education in many OECD countries, but also the limits to the ability of HEIs in some countries to attract private revenue and the difficulty of sustaining such revenue streams over time.
HEIs see income diversification and efficiency gains as key to financial sustainability
Recent evidence suggests that that income diversification remains one of the avenues that universities in OECD countries pursue to support their financial sustainability, alongside measures to improve the efficiency of resource use and strategic planning to decide on the institutional activities that should be expanded, consolidated or stopped.
A 2024 survey undertaken by the European University Association (EUA) of 168 higher education institutions from 34 European countries, for example, explored institutional approaches to income diversification, resource efficiency and strategic planning (Bennetot Pruvot, Estermann and Popkhadze, 2025[10]). The survey found the responding institutions were prioritising public competitive funders and European Union funding sources as additional revenue sources, ahead of contracts with business. Two other forms of private revenue – income from services provided by institutions and income from philanthropy – were viewed as the lowest priorities for revenue diversification. The survey results also highlight some of the difficulties the institutions experience in securing such third-party funding, particularly in terms of matching available external funding opportunities with institutional research strategies, the resource-intensive nature of competitive funding processes and the failure of external funding to cover the full economic costs of activities. Concerns exist in several OECD higher education systems about the low – and often declining – success rates in competitive funding applications for research projects, which substantially increase the costs of securing such resources (OECD, 2021[1]).
To improve efficiency and cost control, over three-quarters of the European higher education institutions responding to the EUA survey report they are already implementing actions to digitalise processes, improve strategic planning and staff development, use budgeting indicators and deploy improved cost-accounting methods (see Chapter 2 on this last point). Over 90% of institutions report that they also use or plan to use technology-enhanced learning to improve efficiency. As discussed in Chapter 2, research to date has returned mixed evidence on the extent to which technology permits cost savings in teaching and learning with constant levels of quality and student experience. As AI offers more opportunities to deploy technology in learning settings, further research into the effects of this on both costs and the student learning experience will be required.
The findings of the European survey align largely with trends and recommendations highlighted in a recent expert-committee report to the government of Ontario in Canada, which highlighted scope to improve efficiency in institutional administrative services, space use and non-labour costs in Ontario’s public universities and colleges (Harrison, 2024[11]). The same report, like the EUA survey, also pinpointed the need to take strategic decisions on institutional activities in the face of changing student enrolment and operating conditions. Focusing on areas of strengths, rationalising activities that no longer align with institutional strategy and cooperation with other institutions are highlighted as important avenues to support the long-term financial sustainability of institutions (Bennetot Pruvot, Estermann and Popkhadze, 2025[10]; Harrison, 2024[11]). The OECD has also highlighted these areas as important for the future financial sustainability of higher education in its system-level reviews, notably in the 2022 report on resourcing higher education in Portugal (OECD, 2022[12]).
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