 Income Contingent Loans for Higher Education and BeyondChapter 19 in Income Contingent Loans, 2014, pp 223-237 from Palgrave Macmillan Abstract: Abstract 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. Keywords: Risk Aversion; Moral Hazard; Real Interest Rate; Adverse Selection; Parental Leave (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-137-41320-8_20 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in International Economic Association Series from Palgrave Macmillan |
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