Funding of higher education can vary greatly between countries, leading to different effects on efficiency and equity in education. Efficiency and equity in education are inversely proportional, which is one of the biggest problems within higher education funding. Eventhough mixed source of funding, which ensures both efficiency and equity, is in the increase, noticeable differences between countries still persist. The theoretical part of the thesis defines the concepts of higher education, funding of higher education, efficiency and equity in education and also presents the characteristics of higher education and its financing in three EU member states; Slovenia, the Netherlands and Portugal. The empirical part initiates with the selection and definition of efficiency and equity indicators, which present the basis for four hypotheses that were examined to help forming an answer to the main research question. In terms of efficiency in higher education, the results showed that potential financial measures, if set by the state, contribute to the efficiency in higher education. In terms of equity in higher education, the most important finding is that the socio-economic background, more precisely the level of parental education, has a significant impact on the level of education of their child.
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