In many countries, primary and secondary schools are mostly funded by the government. In 2021, governments in OECD countries covered an average of 83% of the costs for schools across all levels, not counting early childhood programmes or universities. At these two levels, the mix of public and private funding differs more between countries. For example, about 19% of university funding comes from households, but this varies widely among countries.
Sources of funding for education
Formal education can be funded from different sources, including government funding and private means such as tuition fees covered by families or companies sponsoring apprenticeships.
Key messages
Most government education spending goes directly to schools. Additionally, governments provide support to households with subsidies towards tuition fees and offer student scholarships or subsidised student loans. Companies may receive support in the form of subsidies, for example to train an apprentice. These kinds of transfers are uncommon in primary and general secondary schools, being less than 1% of expenditure on educational institutions. These transfers become twice as common for vocational upper secondary programmes, making up 2% of total expenditure. Even more important in bachelor’s programmes and beyond, they represent 5% of expenditure.
How governments and private parties share the cost of education has stayed the same in the last several years for OECD countries. In funding compulsory education, private funding made up 9% of all funds in both 2015 and 2021. The figures were 29% and 28% respectively for universities. Some countries have changed, though – for example in the United Kingdom the role of private sources in funding universities has grown from 71% to 74% over this period, the highest share across all OECD countries, whereas in Estonia, it dropped from 24% to 15%.
Context
Government transfers to the private sector
In primary, lower secondary and general upper secondary education, government transfers to the private sector are very small in all OECD countries. In vocational upper secondary programmes, such transfers represent a larger share (up to 15%) of total expenditure in a few countries. Government to private sector transfers play a major role at tertiary levels in several countries (e.g. Australia, Ireland, New Zealand, United Kingdom).
Government transfers to the private sector as a share of total expenditure on educational institutions by ISCED level and country (2020)
Share of government funding and share of enrolment in private primary educational institutions
In some OECD countries, a large share of students is enrolled in private schools at primary level (represented on the right side of the graph). These countries’ private schools tend to receive most of their funding from the government (top of the graph), despite being privately run. For countries where a small minority of students attend private primary schools, government involvement in the funding of these schools can vary greatly.
