This paper begins with a review of existing financial arrangements in countries belonging to the Organization for Economic Cooperation and Development. Attempts are made to assess the effects of alternative methods of finance on inequalities in education. In addition, some of the proposals that have been made for changing the distribution of costs and benefits of higher education between individuals and society, or between different income and social groups are looked into. In most OECD countries, present methods of financing education are ill adapted to a system of life-long or recurrent education, since students in traditional, full-time higher education are usually more heavily subsidized than adults undertaking part-time education or retraining. Financial aid for students is usually provided at levels and terms which presuppose that students are young, with no dependents. This review shows that the implications of alternative methods of finance for equity and equality of opportunity are extremely complex. Despite attempts, financial barriers exist, and students are often discouraged from entering higher education by the high or indirect costs of study. There is evidence from many countries that those who are most likely to benefit from the expansion of opportunities are those who already have attained a higher than average level of formal education. (Author/AM)