Trends of financing higher education in Lithuania

Today Lithuania and other countries are rapidly moving towards the system of mass higher education. However, a high-quality mass system of higher education cannot be entirely financed by tax payers because tax funding tends to be regressive. The average tax payer funds a service from which only a fraction of the population directly benefits. Higher education system requires public financing to be supplemented on a significant scale from private resources. The author suggests increase financing of Lithuanian higher education by using private resources, i.e. by increasing tuition fees which would reduce the regression of financing the system of higher education. The system where graduates pay a larger share of their study costs would be both fair and economically efficient. Government must give a loan to fund increased tuition fees for studies and the costs-of-living. Currently used mortgage-type loans in Lithuania should be changed into income-contingent loans in which loan repayments would be a fixed proportion of graduate’s annual income. Expanding higher education based on income-contingent, graduate’s contributions are the most direct way to achieve equity in access to higher education