Education is a very essential aspect and should be provided to all students in a country equally. In this respect governments should take initiatives of financing education in order to allow students from poor background to be able to access education. For instance, in the United States of America education is primarily under the responsibility of state and local government. This topic is of great importance as it analyzes the historical and theoretical foundations of funding education. Evaluation of sources of revenues and their influence on educational results is also addressed in this study. This study sheds light to educational institutions, local, and state government in matters relating to education in a global perspective. More light is shed on the determination of capital and general expenditures of educational institutions and an analysis of the role of ethics in the process of making the financial decisions for educational institutions. Additionally, this study will address in a global perspective how government and educational institutions make budget and manage it in order to help in adequately financing education. Finances for supporting education come from different avenues which include grants and other financial aids from different sources. In this case, this study will address these sources and indicate how they impact the aspect of education. In the current world and economy, expenditures of parents towards their children is reported to increase drastically as a result of the increasing cost of education. This study therefore addresses this aspect and indicates what has contributed to this increased costs and what should be done to avoid compromising quality education.

Because of economic conditions of different countries all over the world, it has become very difficult for parents and students to finance their children’s or their education respectively. This calls for economic policies that are implemented by governments in ensuring that all citizens are equally provided with education. Economic policies ensure that there is a portion of the governments spending on public that is allocated for education financing. This study will address the economic policies concerning education all over the world and how they impact educational financing.

Historical perspective of financing education

A number of changes have occurred in the education systems of many countries in the whole world, as indicated by Alan Haskvitz, particularly in matters relating to financing education (58). Most striking aspect has been the sharp drop in the public share of funding higher education and the recent interest in financing based on institutional performance. This has resulted in educational institutions particularly higher education to raise their tuition fees, cut costs by outsourcing services to external providers, and aggressively seek private finances. This has impacted the way these educational institutions provide equality of opportunities when enrolling. Despite the fact that the state government funds education in many countries of the world, there are some people who study in private schools and hence they provide their own funding. This shows that the rationale of state funding is to equalize the whole process in the pursuit of making sure that students from all social classes are in a position to assess education (Allan et al 538).

Back in the year 1789, Thomas Jefferson was for the idea of free public education that was deemed imperative for the new democracy to grow and thrive. Despite the fact that Jefferson pushed very hard for free public education, he never witnessed government- funded public education during his time. According to Alyson (17), there is need for government budgeting for public education in order to bring about equality in school enrolment. This is because some educational institutions particularly the higher education discriminate upon the poor students as they are unable to pay for their tuition fees adequately (Arnove & Torres 384).

In general terms, education systems have undergone a number of changes right from the roles played by tutors, students, parents, governments, educational institutions, and other sources of educational finance. These changes have occurred through a long period of time and what can be seen in the present is totally different from what was there in the past. As indicated by Azad and Chandra, in the past education was heavily financed by parents and students and no one could have thought that education would be financed by other financial aids (33). During this period of time, the cost of education was relatively low and hence many people were able to afford it. In the current world and economic conditions, educational financing has become very difficult bearing in mind that many people are enrolled in educational institutions and hence there is a need of increasing the number of tutors. It should be noted that, as put forward by Bayefsky and Waldman (523), the advancement in technology that is experienced in the current world has attracted many people to join educational institutions in order to further education and other to start education. In the United States of America for instance, more than 75% of the total population are educated meaning that this country has developed heavily in terms of education (Brossard & Borel 23). In most of the developed countries like Australia, Japan, United Kingdom, France, and Germany among others; people are increasingly acquiring education and hence there are a lot of students in public and private educational institutions hence calling for increased number of tutors.

According to Boadway and Shah, in the traditional days most people were not educated and hence the government was able to pay for the few people’s educational expenditures in most countries (41). This implies that the cost of education in the traditional days was not high. In the current world, a lot of people are acquiring education through public, private, and e-learning means and hence there is need for technological advancement and other facilities to aid education hence making the cost f education to be very high. As a result of this many governments are usually not able to afford to finance education for their citizens and hence parents and students are supposed to finance their education. Taking an example of financing education in Canada, it is clearly indicated that universities in this country finance education through sale of goods and services, investments, and fund raising (Cancian & Danziger 320). This is one of the ways that was used in funding education in most of the American countries. Traditionally, many governments had absolute role of financing education and hence many people were able to attain even higher education through the financial aids that were provided by governments. In the current world, as revealed by Brux (107), a good number of bright students in developing and less developed countries are unable to join higher education because of lack of financial assistance fro governments. This has resulted to low levels of education in these countries (Checchi 260).

There is an attempt to finance education for students according to their performances in many different schools. This aspect has been heavily criticized by many people especially the proponents of equality in educational financing (Chriatopher & Robert 189). It should be noted that even in the traditional days, education was provided by private and public educational institutions and hence parents used to take their children to any of the two aspects depending on their levels of wealth. According to Cohen et al (13), education was traditionally financed by local governments where localities used to handle all financing for the schools in their communities. The source of revenue was from property tax. In this respect, schools relied on the properties owned by each community. This method of education funding had shortcomings in that students transferring from one school to another particularly within different communities were considered as out of place (Cordes et al 100). This is because community properties were only used in funding education of students who come from that community. In this respect, students were indirectly forced to study in schools within their community if at all their education was to be financed by community properties (Craford 32).