A differential fee policy was adopted at the Open Learning Institute (OLI) of Hong Kong after a process of conceptualization, planning, proposal, approval and implementation. Under the differential fee policy different tuition rates were charged for different courses. The differential fee policy was conceptualized at OLI based on economics, financial, social, marketing, and operational considerations. Supply and demand economics provided the theoretical basis for the concept. Financial gains were anticipated due to the elasticities scenario, inflow of new students, and their course enrollments. Empirical evidence from market research surveys and interviews indicated that there could be support among students and the public for such a scheme. Lowering fees for entry level classes could dispel a perception that OLI fees were high. The new policy would not lead to any significant increase in operational efforts. Financial analysis indicated that income would increase by 15 percent immediately through fees and by 90 percent in throughput income. Student, staff and leadership concerns were overcome through talks with the student union, meetings with staff, and work with the governing council. Since the new fee structure was approved in 1992, enrollment has increased 8 percent, and overall fee revenue has increased by 23 percent. There have not been complaints or media queries about the policy. (JB)