It is well-publicised that the Sarawak Government is working towards providing free tertiary education to all eligible Sarawakian students in state-owned universities and institutes of higher learning by the year 2026.

This is welcoming news, particularly to middle and lower-income households in the face of increased living costs and economic uncertainties. While policymakers fine-tune the mechanisms for implementing and sustaining the free tertiary education initiative, this article aims to acquaint readers with the prevailing models of free education from around the world and the lessons they offer.

The essence of free tertiary education is that students can pursue their studies at zero cost i.e. without paying tuition fees and associated expenditures. In such a system, the government, rather than individual students, would bear all associated costs.

In reality, there are different models and approaches to implementing free tertiary education, depending on a country’s economic, social, and political contexts. These models vary primarily in terms of the degree of cost-sharing between the government and households; as well as the mechanisms for the government to fund its share of the cost.

Global Models for Free Tertiary Education

Scandinavia countries (Denmark, Sweden, Norway, Finland)
Model: Scandinavian countries are known for their generous institutional funding and high public expenditure on education. Most countries offer tuition-free or very low-cost tertiary education to both domestic and international students, along with financial support for living expenses. Strong social safety nets are also in place to assist graduates entering the job market. 
Comparison: The Scandinavian education model’s sustainability relies on high-income taxes, which are among the highest in the world. The burden of high taxes is a longstanding concern, particularly among working individuals. Also, the high demand for tertiary education means limited access and stiff competition for spots. To reduce the funding burden, recent policy reforms are trending towards increasing the number of fee-paying international students and shortening some course duration.

Australia and New Zealand
Model: Australia and New Zealand adopt a mixed higher education model where the government partially subsidizes education. Students access loans with favourable, often income-contingent terms. In Australia, the Commonwealth Grant Scheme (CGS) supports eligible students, and the Higher Education Contribution Scheme (HECS) enables students to defer loan payments until a certain income threshold is reached, with debt indexed to inflation.
Likewise, New Zealand’s zero-fee policy, introduced in 2018, offers one year of free study in 2018, extending to two years in 2021 and three years in 2024. Domestic students are eligible for interest-free loans to cover tuition and living expenses, repayable after reaching a specific income level. 
Comparison: In Australia and New Zealand, education models balance cost-sharing between the government and students, but face challenges such as reduced government funding in the midst of economic downturn, rising student debt, and complex loan systems. The effectiveness of New Zealand’s zero-fee policy is also debated, amidst concerns about high living costs and selective admissions impacting lower socio-economic groups.

United States of America
Model: The U.S. higher education system is the most liberal in terms of tuition fee deregulation and admission policies. Notably, private institutions charge significantly higher tuition fees than public institutions. The high cost is justified on the basis that the wealthier students paying full fees help subsidize those from less affluent backgrounds, thus promoting diversity and equitable access.
Comparison: The U.S. education model places substantial financial responsibility on students, leading to high student loan debt. Access to education is largely influenced by socioeconomic status, with the U.S. having some of the highest tuition fees worldwide. This contributes to significant student debt and sparks ongoing debates about the student debt crisis, a major financial challenge for many graduates. 

United Kingdom
Model: The UK’s higher education funding model features tuition fees for all students and student loans with income-based repayments. Universities can set their own fees, encouraging competitive and diverse educational offerings. The government plans to launch the Lifetime Learning Entitlement (LLE) scheme, providing £37,000 per person for lifelong education, covering up to four years of study.
Comparison: The rise in tuition fees has sparked debate, but its income-contingent loan system, overseen by the Student Loans Company, aims to make higher education more affordable. This system eases the financial burden on students by tying loan repayments to their post-graduation income. 

Economic and Social Implications

Overall, these models reflect a range of approaches to funding tertiary education, each balancing the goals of accessibility, quality, and financial sustainability in different ways, and each facing distinct challenges in terms of equity, student debt, and policy effectiveness.

The ongoing debates among economists, educators, and policymakers revolve around the advantages and disadvantages of free tertiary education. On one hand, it can enhance human capital development to sustain and foster economic growth and competitiveness, as a more skilled and knowledgeable workforce is needed for the modern economy.

Improved accessibility and affordability of education benefit those experiencing the middle-income squeeze and underprivileged rural communities the most. Such measures promote equal opportunities and inclusivity, contributing to the reduction of socioeconomic disparities. Furthermore, it eases the student debt burden, lessening financial stress and improving mental well-being, allowing students to focus on their passions without monetary worries.

Challenges and Considerations

On the other hand, free tertiary education entails significant government expenditure and public funding, potentially leading to fiscal deficits and impacting other sectors like health, infrastructure, and social welfare. It may lead to reduced efficiency and accountability in tertiary institutions regarding educational standards and quality. As these institutions may need to accommodate a larger and more diverse student population with varied backgrounds, abilities, and interests, challenges could arise in the absence of sufficient resources, staff, and facilities.

Such constraints can affect curriculum development, teaching methods, assessment practices, and the quality of support services for students. This, in turn, may impact the skills, knowledge, and competencies of graduates, potentially influencing their employability and adaptability in the workforce.

Free tertiary education may lead to an oversupply and mismatch of graduates, as it allows more individuals to access and afford higher education without fully considering cost-benefit analysis, labour market demands, or their own abilities and interests. This could result in a surplus of graduates in certain fields or levels and a shortage in others.

Additionally, it might skew the preferences of graduates, leading them to choose courses or careers influenced by social norms, peer pressure, or personal passions, rather than aligning with labour market needs and opportunities. Such a scenario could create a mismatch between the aspirations and realities of graduates, affecting their job satisfaction and performance.

Countries like Malaysia considering free tertiary education must assess its economic, social, and political feasibility, as it requires significant public investment and could affect funding for other sectors like healthcare and public infrastructure. Ensuring the quality and relevance of such education is vital for enhancing graduate employability and economic growth. 

Equally important is promoting equity and inclusion to combat inequality and support marginalized groups. Additionally, embracing flexible and innovative learning methods like blended, remote, or HyFlex learning is imperative to increase accessibility and meet diverse learning needs in today’s dynamic educational landscape.