Europe's Education Crisis: College Costs Soar

College students are known for their ability to survive on instant noodles, toast and a shoestring budget. But recently, some students in Ireland have gotten particularly desperate. "I have heard from students who have lived on biscuits stolen from the chaplaincy in their college for a week, students who have lived in their cars for months," says Hugh Sullivan, education officer at the Union of Students in Ireland, a group that advocates on behalf of more than 250,000 students across the country.

The reason? Over the past 15 years, fees at Irish universities that cover the cost of registration, exams and student services have gone from the equivalent of $240 per student to nearly $2,000. On top of that, the government cut funding to universities by 5% last year, and Sullivan expects another 5% cut this year. "It's a time of famine," he says, adding that even though students don't show up in the country's grim unemployment rate (currently 13.1%), they have become the hidden victim of the recent financial crisis. "The last thing you eat is your seeds."

Europe continues to maintain a relatively low-cost higher-education system compared to the U.S., but Ireland's struggles are becoming all too familiar in the economic downturn as cash-strapped governments across the continent have made massive cuts in public services and begun to charge for things that were once free. "There is definitely a cause for concern at this point," says Thomas Estermann, head of funding for the European University Association. "On the one hand, we see how important it is to invest in higher education and research to overcome the crisis, but governments that had to bail out their financial sectors have to make cuts somewhere. It's difficult to balance that."

The most dramatic cuts have come in Eastern Europe, particularly in Latvia, where the government has cut public funding for higher education in half since 2008. Poland, Hungary and Estonia have all cut or plan to make cuts of between 4% and 7%. But it's not just the east — wealthier European nations are also feeling the bite. This month, Britain announced cuts as high as 14% to some university budgets, while both Italian and Spanish schools face reductions of about 10%. The situation is so bad in Spain that schools extended holiday breaks last year to save money on heating, water and electricity.

Two countries have appeared to weather the storm so far. Germany plans to boost its education budget by more than 9% in 2010, while France is increasing spending on higher education by $2.4 billion this year, a jump of about 5.3% from last year. However, experts caution that budget increases on this scale can't last in the economic downturn. "If one follows the announcements of the government, it looks as if universities should not suffer so much," says Dr. Paul Flather, head of the Europaeum, a U.K.-based association of 10 European universities. "But in practice, talking to professors and our colleagues there, the picture doesn't look so healthy."

Taxpayers are becoming increasingly aware of the high cost of France's higher-education system, which has little selectivity — virtually anyone who wants to study at a university can do so for about $540 per year. The government subsidizes the remaining cost per student, which can be as high as $16,160 per year. An increase in the number of students can also mask the growing unemployment problem in France, according to François Ameli, a professor of international law at Université Paris 1 Panthéon-Sorbonne. "The philosophy of France [on higher education] is a mass sort of thing. We have over 2.2 million students, which is a lot for a country of 60 million," Ameli says. "Universities are also a reservoir before unemployment, so [the government] can avoid putting students into statistics."

Despite the fact that most European economies are officially growing again, the effects of the recession are only just beginning to hit national budgets, Estermann says. Though countries like France might not be willing to make sweeping changes to their education systems yet, incremental changes over the next several years could produce a wholly different picture of education in the future. "The crisis is not over. We will need to wait some time to see what's really going to happen in some countries," Estermann says. "Even those who do not cut now will come under pressure in the future."

Chronic public-finance problems are forcing countries to consider alternative funding for universities. Britain, for instance, introduced tuition in 1998. Fees to attend state universities are now capped at $4,800, but university officials say government grants barely cover half of what it costs to teach an undergraduate student. In order to remain competitive with the university systems in the U.S., Canada and China, Christopher Patten, the chancellor of Oxford University, told the annual conference of the Independent Schools Council in London last month that British tuition fees must be increased. "I don't think it is realistic to say that the gap should be closed by the taxpayer," he said. "It is plain that we are going to require higher tuition fees."

Even Sweden and Finland, long defenders of high taxes and socialism for the greater good, have decided to start charging non–European Union students tuition to study in their countries. "There is a huge debate in Sweden now about tuition fees," says Robin Moberg, vice chair of the Swedish National Union of Students. "On the one hand, the government has said foreign students shouldn't be supported by our taxes, but our argument has been that higher education is fundamentally a part of society."

The funding crisis in European higher education is unlikely to improve anytime soon. "There's quite a lot of anxiety in the system," Flather says, cautioning that short-term cuts will have long-lasting effects on universities. Undermining these "engines of democracy," he adds, could end up being more costly than people think — not in terms of dollars and cents, but in the future well-being of European societies. "We're part of the future, we're part of recovery," he says.