It is widely acknowledged that China's higher education faces a serious funding shortfall. Though the past years have witnessed increased government input, the funding is far from enough.

According to relevant statistics, while the number of university students grew 2.91 times between 1998 and 2004, the government financial allocation for education grew only 1.78 times. And as a result, funds for each student declined from 9,829 yuan in 1998 to 6,982 yuan in 2004.

Since universities and colleges started charging for education in 1997, tuitions have increased fast. But given people's inability to bear such a burden and their increasing complaints, tuitions are unlikely to hike in the near future.

In the meantime, universities and banks seem to have overused and over-expanded their credits respectively, and there exist serious asymmetries between the scale of loans and their structure as well as the pace of universities' expansion and their ability to repay the loans.

Since 2001, scales of loans to universities have been expanding sharply. True, universities have yielded great developments and achievements under banks' strong support, but their ability to requite that support has also been lowered as their debt ratios have increased greatly. In the face of these pressures, we need to have a look at the financing of higher education in developed economies.

In the US, all the three sides of the federal government, state and local governments offer funds to higher education. While money from the federal government accounts for 10-12 percent of the funding of public colleges, that by state governments consists of the major source for universities. Besides, local governments offer funds, usually in large scale, to community universities established by them.

American undergraduates and their families bear 25 to 50 percent of the total education cost by paying tuitions, fees for board and lodging. But in recent years, Americans have to arrange for the money earlier as charges by universities have been growing.

Other ways of income for universities, especially those prestigious and private ones with good facilities, include operation revenues of hotels, university hospitals and real estates, sales of educational software, recorded and printed products. Besides, states often waive duty for universities' assets and their businesses.

Here it is worthwhile to note that American people are very enthusiastic and generous in donating for the cause of education, while the US government also supports citizens' contributions by exempting certain duty.

In Britain, all higher education institutions get fiscal allocation from the central government mainly in two ways: loans for students and funds for a specific scientific research on subjects such as environment, agriculture, economics and society.

Due to the expansion of education and the growing burden on the central government, universities started charging students in 1998 for tuitions and fees, which can take half of the central government's pressure. Meanwhile, attracting non-European international students is a priority as they were required to pay two to four times higher than native and European students do.

Endowments by people as well as commercial giants are also strong as donors and universities may benefit each other with economic support and research results respectively.

Japan's state-owned universities can get 50 to 60 percent of the total expense from the central government while charging students little, but the same percentage of operation cost by private universities relies on charging students. In central and northern European countries like Germany and Sweden, governments still pay most of the money, sometimes as much as more than 90 percent, for education.

All the above experiences and examples offer valuable lessons to us. And based on China's actual conditions, we may learn from these experiences in bid to develop our education.

First of all, governments at all levels should bear their liability for funding for higher education as the amount of money they poured in has turned out to be insufficient. The central government should also improve relevant credit policy to reduce universities' financial risks.

We shall open up more channels so that money from various segments of society can be injected into universities, and market-oriented mechanism can be set up to let more parties, whether public or private, join the development of education.

On the charging of tuition and other fees, we must make it bearable for all those qualified students to ensure that equality in education can be realized.

After 30 years of reform and opening-up, many Chinese people, who have become rich, are increasingly supportive of the nation's educational cause. The government should work out relevant laws and regulations to secure transparency and efficiency of educational endowment.

In the meantime, universities should try to increase their revenues from sales and services of educational products.

(China Daily August 26, 2008)