This study theoretically analyzes the households’ choice regarding child’s
university attendance jointly with household consumption and private tutoring
under borrowing constraint where the households are differentiated by parental
income and child ability. Due to the enrollment limit, the entrance into the
high-quality university entails an intense competition. This may incur the cost
of private tutoring that leads to the overrepresence of children from rich
families in high-quality university attendance. By reinforcing public education
or providing more education subsidy to households, the government can
mitigate wealth bias. However, its effect is limited in reducing the inequality
of educational opportunity without tuition control. With tuition control,
however, both policies are effective in improving equality of educational
opportunity. Especially, providing more education subsidy is more effective
than reinforcing public education.