Learning to Live with Loans

A relatively recent paper that argues that the income-contingent loan financing mechanism offers an international model that can be transferred to other countries. A sister paper argues that such arrangements do not discourage access among marginal choosers

http://ideas.repec.org/a/eee/ecoedu/v24y2005i5p491-512.html



Learning to Live with Loans? International Policy Transfer and the Funding of Higher Education

Bruce Chapman
David Greenaway

http://ideas.repec.org/a/bla/worlde/v29y2006i8p1057-1075.html

Abstract

Over the last decade or so a number of OECD economies have migrated from providing higher education free at the point of consumption to levying user charges. However, rather than charges for tuition being paid up-front, contributions have taken the form of income-contingent loans. Graduates therefore contribute to the costs of their education, after they have graduated and when they are earning. The earliest example of this instrument was in Australia, with the introduction of the Higher Education Contributions Scheme (HECS). This paper argues that following their successful introduction in Australia, income-contingent loans offer a good example of successful international policy transfer, with elements of that scheme being adopted and modified for use in New Zealand, South Africa and the United Kingdom. The paper reviews the conditions for successful policy transfer and discusses the reasons why the arrangements have not proliferated in non-OECD countries.

Copyright 2006 The Author Journal compilation 2006 Blackwell Publishing Ltd. .