Higher education finance is one of the main issues in the economic analysis of
higher education systems. The financial difficulties witnessed in both developed
and developing countries have led researchers and policy makers to discuss
about different alternatives of sustaining higher education systems. In this study
are discussed the basic theoretical foundations of cost sharing and the different
forms of implementing it, namely through student loan systems. This study also
aims at discussing the relevance of the political and socio-economic context for
the relative success of the adoption of cost-sharing.
These aspects will be analysed by focusing in the Ethiopian higher education
system. This system has been characterized by an elite enrolment pattern,
since it has traditionally excluded the majority of potential students who could
join the system and therefore contribute to the development of the country. The
Ethiopian system has been facing a number of challenges throughout its recent
history, and financing the sector is certainly one of the major ones. Since the
reform measures that have started in 1994, that system of higher education has
been going through a number of important developments. Cost sharing is one
of the main policy changes and has been adopted in 2003 to meet a specific
set of objectives. This study investigates the challenges and prospects of cost
sharing in Ethiopia, namely by taking into consideration the political and social
reality of the country.