 Repayment burdens of mortgage-style student loans in China and steps toward income-contingent loansYu Cai, Bruce Chapman and Qing Wang Economics of Education Review, 2019, vol. 71, issue C, 95-108 Abstract: Currently China is experiencing unprecedented growth in higher education enrolments, with this trend set to continue. Whether higher education financing policy is able to facilitate this expansion is a critical issue for both education outcomes and economic growth. Using cross-sectional earnings data from the Chinese Household Income Project we find that a significant proportion of low-income graduates have a high likelihood of experiencing financial difficulties with current loan arrangements, implying high levels of financial hardship, a reliance on family members to meet repayments in order to avoid difficulties, and for some, default. In contrast we show that a properly designed income-contingent loan scheme has the potential to significantly mitigate, even eliminate, these concerns without attendant high budgetary costs. Our findings have important policy implications for Chinese higher education financing. Keywords: China; Student loans; Higher education financing; Time-based repayment loans; Income-contingent loans (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecoedu:v:71:y:2019:i:c:p:95-108 DOI: 10.1016/j.econedurev.2018.10.006 Access Statistics for this article Economics of Education Review is currently edited by E. Cohn More articles in Economics of Education Review from Elsevier |
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