University fees are high – even excessive in the minds of some parents. However, nothing seems to be able to bring them down. Year after year, colleges and schools charge the same fees despite advancing technologies. If anything, the price is going up. 

Fortunately, some innovative cost-cutting measures are on the table and have been proposed. Some will undoubtedly see the light of day, while others depend on social and political will. 

So, what can be done? Let’s take a look at some of the options. 

Fee Regulation

One option is to simply regulate fees so universities can’t charge students high costs during their tenure. This approach would be a significant boon for parents, many of whom struggle to support their children financially in higher education, if at all. 

Fee regulation would also hopefully reduce the crippling burden of student debt. College-educated individuals would spend less time paying off loans and more time contributing to the economy and living the life that they want. 

Regulators might also try to get universities to pivot away from for-profit models to something closer to stakeholder capitalism. While this approach might not work for conventional businesses, it is a proven method in places like Europe, where colleges aren’t just glorified fronts for hedge funds. 

Improved Efficiency

Universities could also potentially lower costs by improving efficiency. Undoubtedly, many colleges operate inefficiently, missing out on opportunities to save across the board. 

The number of efficiency measures that universities could take is extraordinary. For instance, one option is to streamline operations. 

Some institutions are already doing this with shared services for universities. The idea here is to do everything that has to be done locally on-site and shift everything else over to third parties. 


For example, colleges need to run their own sports programs locally, but they can shift things like the finance department and HR to a cheaper external provider. Other things to outsource include expensive operations, like research administration and taking care of cybersecurity. 

Universities can save a significant chunk of their costs when they make these savings. Institutions can then pass them on to students in the form of lower fees. 

Avoidance Of Other Regulation

At the same time as implementing fee regulations, governments could spare universities from other regulations that add to the cost of operation. Many institutions face crippling constraints on how they can operate because of unnecessary government oversight. These colleges could reduce fees significantly if they could respond to incentives to cut costs. 

Alternative Funding Models

University fees could also come down if governments and society as a whole experiment with alternative funding models. For instance, in Europe, many countries implement a graduate tax. Students don’t pay anything upfront for their education (or only pay low fees) but must pay additional taxes once their post-grad income goes above a certain threshold. Governments then funnel this money into the university system to pay for the next generation of students. 

Graduate taxes are essentially a form of post-grad debt scheme. However, they only apply when workers begin earning above a certain amount. Unlike debt, students aren’t putting themselves at risk of bankruptcy in the future. 

Other funding models do exist, but they usually imply a lower student population, which is why governments are keen to avoid them. For instance, you could rely on philanthropic donations. However, the number of people going to university would probably collapse by 90%, with only the best and the brightest attending top institutions (as occurred in the past). For-profit models would still exist for those who wanted to pay out-of-pocket, but they would be less popular because of the lack of student debt services. 

Higher Government Funding

Of course, we could wind the clock back a century and get the government to fund higher education, eliminating the cost for students entirely. This approach might enable universities to eliminate fees altogether and simply charge students for accommodation (if that). 

Naturally, governments are quite averse to such policies. That’s because taxing the population more is a vote-loser and something many administrations are keen to avoid. 

Furthermore, governments already provide funding to universities, but it hasn’t resulted in much reduction in fees. Institutions still charge students a lot of money to attend and have the name of the college on their degree CV. Of course, you could get around this with regulation, but that would defeat the point of higher government funding in the first place. 

There’s also a concern that lowering fees could lower standards and universities might lose their international prestige. Again, it is something that many officials consider when playing with colleges’ budgets.