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EDUCATION INDICATOR: An International Perspective

Indicator 45: Source of Funds for Education

What is "public" and "private" education? /*

In the United States, public and private schools are generally distinguished by the distinct separation of both their governance and their funding. Typically, public schools are governed and financed by public authorities, while private schools are governed and financed by private authorities. In this respect, the U.S. system is atypical among the developed countries.

Many developed countries finance both public schools and private and religious schools with public funds, and they have done so for many years. The proportion of public expenditure used to subsidize private education amounts to 4 percent in the United States, 7 percent in Switzerland, 10 percent in Australia, and nearly 12 percent in France. In Belgium and the Netherlands, private education is entirely publicly funded; thus, the proportion of funding targeted to private-school students approximates the proportion of private-school students in the student population. The issue of public funding in many of these countries does not provoke the widespread controversy that it does in the United States. In return for the funding, the private and religious schools in some countries agree to honor government standards in matters of curriculum, class size, and the like; and their students must still pass the same national examinations as their public-school peers.

The education finance and governance systems in place in Germany, France, and the Netherlands provide an interesting contrast to the system currently existing in the United States. The following paragraphs provide an overview of these systems.

Historically, Germany has had a variety of school types: public schools with a Catholic character, public schools with a Protestant character, public schools with some other distinctive world view, public schools without a religious orientation, and private schools. As in the United States, each German state is responsible for operating its own schools; therefore, the extent to which certain types of schools exist and the level of religious instruction varies among states as well as among localities within the states.

Private schools in Germany are permitted to select both their pupils and teachers and are not rigidly tied to state regulations in regard to the choice of teaching material or the number of weekly lessons. In return for public funding, however, they must hold state examinations and issue reports and certificates, just as would a state-run school. As long as their students perform adequately on the state exams, the private schools are generally left alone.

The French public and private schools differ markedly from the German. Religious instruction does not exist in French public schools, although they are not necessarily "value-neutral" either, as the French state is interested in promoting its own values and beliefs among its citizens. Like Germany, however, France provides government funding to offset the cost of private schooling. Nonpublic schools have several alternatives with regard to governance and funding: (1) to continue completely independent of government intervention, subject to employing qualified teachers; (2) to be absorbed into the national public education system; (3) to accept government requirements as to curriculum and testing in exchange for staff salaries (contrat simple); and (4) to accept, in addition, some government control over pedagogy and the selection of teachers, in exchange for operating expenses as well as salaries (contrat d'association). Among Catholic schools, most elementary schools, with their limited funding needs, choose the contrat simple; while many secondary schools, having higher operating costs, choose the contrat d'association. Schools receiving funds from the contrat d'association must demonstrate that they have a distinctive character or philosophy not catered to in the public system. Private schools without a religious orientation generally choose to remain independent of government intervention, though they do receive a certain amount of public funding under a different law.

The Netherlands finances public and private schools on a completely equal basis, with the Dutch government paying directly for teachers, buildings, and other school costs in both sectors. Given the central government's direct financing of private schools' expenditure on the same basis as schools governed by municipalities, they are not as independent as private schools in most other countries; in fact, all schools must follow the same government rules with respect to administration and curriculum. The most significant difference between private and public schools is that only the former may turn away prospective pupils under certain prescribed conditions. Another difference is that private schools may charge fees for extracurricular activities. In 1990, 31 percent of primary pupils were in public schools and the remaining 69 percent were in private schools, either Protestant, Catholic, or neutral.

Dutch education law requires a "responsible authority" for each school. This may be the national government (for some secondary and higher education institutions) or the local government (for elementary education), in which cases the school is considered public. If the responsible authority is an association, foundation, institution, church council, or religious community, the school is considered private. In order to start up, obtain funding, and remain in operation, a private school must show that it will be attended by a sufficient number of students. The specific number varies according to the size of the community. If no other school is available that provides an education of the same denominational or pedagogical character, the specific numbers are lowered.

Public support of private elementary and secondary schools in the United States is meager. In a few states, students enjoy publicly provided transportation to private school or their parents receive tax credits equal to the amount of their tuition bills. Private schools can also receive federal education grants for poor children, such as those for compensatory instruction or reduced-fee lunches. Private universities in the United States, however, generally receive large amounts of public funds. They take the form of federal or state student loans, federal research grants, and state grants for academic programs that serve state residents. All private schools in the United States at all levels also obtain property-tax relief.


*/ The primary sources for this sidebar include: S.M. Barro, Preliminary findings from the expenditure comparability study (Washington, D.C.: SMB Economic Research, Inc., 1993); Organization for Economic Co-operation and Development, 1986 Education in OECD countries: A compendium of statistical information (Paris: OECD, 1989); Organization for Economic Co-operation and Development, 1988-90 Education in OECD countries: A compendium of statistical information (Paris: OECD, 1993); Organization for Economic Co-operation and Development, School: A Matter of Choice (Paris: OECD, 1994); S.M. Burro, J.D. Sherman, R. Phelps, International Expenditures Comparability Study: Draft Report (Washington, D.C.: Pelavin Associates, Inc. and SMB Economic Research, Inc., 1994). Choice of Schools in Six Nations (Washington, D.C.: 1989); U.S. Department of Education, Office of Policy and Planning, International Education Comparisons (Washington, D.C.: September, 1992).

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