Income contingent loans in higher education financing

Bruce Chapman

IZA World of Labor, 2016, No 227, 227

Abstract: Around nine countries currently use a national income contingent loan (ICL) scheme for higher education tuition using the income tax system. Increased international interest in ICL validates an examination of its costs and benefits relative to the traditional financing system, government-guaranteed bank loans (GGBLs). Bank-type loans exhibit poor economic characteristics: namely, repayment hardships for the disadvantaged, and default. This damages credit reputations and can be associated with high taxpayer subsidies. ICLs avoid these problems, but effective collection of debt requires a sophisticated mechanism.

Keywords: income contingent loans; government-guaranteed bank loans; consumption smoothing; default insurance; repayment burdens (search for similar items in EconPapers)
JEL-codes: H42 I20 I21 I22 I23 I28 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Journal Article: Income-contingent loans in higher education financing (2022)
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