As a result of current economic conditions, developing countries have had to re-examine their methods for funding higher education. The World Bank has suggested several policy changes to help countries such as Colombia cope with the situation. The goal of these changes is to allow more equitable access to education, to increase the resources flowing to education, and to derive maximum benefit from this increase in funds. The proposed changes include decentralizing management, expanding private schools, and introducing student loans and selective scholarships, and cost-recovery in higher education. This paper examines the applicability of such a package in Colombia. It is argued that the main problems are the quality of higher education and access to education. Other obstacles include the 'ideology' of free higher education and the opposition of the upper classes to selective scholarships in Colombia. The prospects for decentralized control of education are seen, at best, as a remote possibility. © 1990 Kluwer Academic Publishers.