1Students Loans in Europe An Overview

Education is expensive. The average global effort in favour of education represented 6,7 % of GDP in OECD countries in 1995, and this effort is still largely due to the public sector1. The conjunction of three reasons might explain the many recent developments on the efficiency of this financing. First, education is not a pure public good. Second, as a consequence of the spectacular rise of graduates and students ’ numbers since the end of the 60s, especially in Europe2, education public budget experienced a rapid growth and is now one of the most important public budgets in many countries. Third, at the same time, the government budget constraints became harder, leading to an extended period of financial stringency. In developed countries, the debate focuses on the financing of higher education for several reasons: the rapid growth of this budget, the persistence of social inequalities despite an extensive public financing, especially in Europe, and the fact that letting primary and secondary education almost entirely free and publicly funded is generally admitted. Because education is not a pure public good, a response to this funding crisis is to increase on a significant scale private funding of higher education. This strategy is particularly supported by the World Bank 3, whose recommendations, based on efficiency and equity considerations, are relayed by numerous studies4