The use of government fund to give free higher education impacts negatively on economic development.
Here we have to ask ourselves: Is the money meant for a single, specific purpose or is it for general use?
The money that people carry around in their wallets or have in their bank accounts is used to buy all kinds of things and pay for all kinds of services. If this money is not intended for any single, specific purpose, then we can refer to it as funds (plural).
Sometimes, however, a sum of money is set aside for a particular purpose, and this ‘specific-purpose money’ is referred to as a fund (singular), and it is usually possible to imagine a name for the fund: “The Social Welfare Fund.” Often it is money organised by a particularly wealthy person, a group of people who have money, or an institution.
Let’s take a look at some examples.
Another option – if the exact source of the money is not important – would be to use the uncountable noun funding:
Returning to our opening sentence, our writer was – I think – referring to a quantity of money managed by the government for a wide variety of purposes, which in this instance will be used to fund higher education. It is easy to imagine that the same money may be used for other equally or more important needs – hence the writer’s comment about the negative impact on economic development. In this case we need funds (plural):
In the event that the government has a separate quantity of money that is only intended for higher education funding, then that quantity of money would have a name. This – specific – fund would be less likely to impact negatively on the economy because other areas, such as defence, would also have been given their own – specific – fund:
Notice that if a fund is for a specific purpose, its full name often appears somewhere in the text (..the higher education fund).
Meanwhile, if you are referring to a sum of money that might well be used for several different – unspecified – purposes, and this sum of money does not have a name, then use funds (with ‘s’) or funding (uncountable) as a synonym for money.