Income Contingent Loans for Higher Education and Beyond

Autor:	Maria Racionero
Rok vydání:	2014
Předmět:	Labour economics Public economics Higher education business.industry Risk aversion Moral hazard media_common.quotation_subject Adverse selection Context (language use) Subsidy Minor (academic) Interest rate Economics Real interest rate business media_common
Zdroj:	Income Contingent Loans ISBN: 9781137413192 Income Contingent Loans
DOI:	10.1057/9781137413208_20
Popis:	The role of income contingent loans (ICLs) as a risk-management device is being increasingly emphasized. Many countries have adopted ICLs to finance higher education and alternative uses have been proposed. In this chapter I first outline the main features of existing ICL schemes for higher education and discuss alternative designs. I then identify issues to be addressed when considering novel applications. Many existing ICL schemes for higher education imply large implicit subsidies: the interest rate is often highly subsidised and the shortfall from non-repayment is typically financed from general taxes. Increasing the share of the cost borne by successful graduates could help alleviate the negative consequences of current designs, but the extent to which this is feasible depends on whether there are significant moral hazard and adverse selection effects. These problems have traditionally seemed relatively minor in the higher education context but could be quite significant for some of the proposed applications.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::b787c81cd1cdb2f4ca28e48a3078515a https://doi.org/10.1057/9781137413208_20 Zobrazit plný text záznamu