Throughout the world, the finance of education is in crisis. The growth of postcompulsory systems of education is no longer perceived as a luxury but rather as a necessity for both industrialized and developing countries. It strains public resources at a time when other needs are becoming more pressing and raises a number of questions: Who should pay for education? Should mixed financing imply a dual system whereby public institutions are financed by public manies and private institutions are supported solely from private sources? Should public funds be channelled to institutions directly or through the students who attend them? What could be the contribution of other sources of finance - firms, benefactors or foreign aid - and how should it be given and received? ls it possible to use resources more efficiently in order to lower unit costs? Should students be helped to bear part of the cost of their education, especially the cost of living white studying, through grants or loans or a combination of both? All over the world, many innovations have recently taken place in the field of postcompulsory education finance. Most of them have been forced upon the system by circumstances. Are they heading in the right direction? This paper tries to answer these questions by building upon what economics can tell us about the optimum financing of education.