Project 2.5

Issues in the economics of higher education financing

The aim of this project is to examine two effects of student loan schemes: the impact of mortgage-type loans on the welfare of students and graduates, and the costs to government of income-contingent loan subsidies.

Project team

Background

There is by now an extensive literature documenting the circumstances that have resulted in all governments in the OECD (and often elsewhere) intervening in the financing of higher education.

These interventions relate to the provision of student loans with two possible repayment arrangements, with collections being determined with respect to:

  • a set time period, known as ‘mortgage-type’ loans (ML);
  • the debtor’s income, known as ‘income-contingent loans’ (ICL).

For the first time the experience of particular countries with respect to student loans will be examined in comparative contexts.

The project will address the question of what the effects would be of hypothetically juxtaposing the loan scheme and design parameters from one national environment to others. International comparisons will provide lessons for worldwide higher education financing reform.

This project will study some countries that have not so far been extensively examined in the ML and ICL reform debate, including those currently or likely soon to be engaged in debate on higher education financing reform (such as Ireland and China).