Can low tuition fee policy improve higher education equity and social welfare?

Abstract

Traditionally there has been a theoretical view that raising tuition fees will undermine education equity and social welfare. This study examines the effects of different tuition policies on both these factors. A statistical analysis is made on the theoretical relationship between higher education tuition fees and dropout probability, which leads to the conclusion that the effects of both policies on education equity vary with circumstances. Further, under severe polarization between the rich and the poor in China, low tuition fee policy fails to effectively improve access to higher education and social welfare for low-income groups. On the contrary, high tuition fee policy may have better effectiveness.