Income Contingent Student Loans for Thailand: Alternatives Compared

Bruce Chapman and Kiatanantha Lounkaew

No 595, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: This paper illustrates the extent of implicit taxpayer subsidies under four possible income contingent loan (ICL) arrangements for Thailand: TICAL, implemented in 2007 only, a variant of TICAL, and two alternative ICL schemes. The implicit taxpayer subsidy calculated with respect to average graduate earnings for TICAL-type arrangements is between 25-40 per cent; however, the average implicit subsidies for the two alternatives are close to zero. When account is taken of disaggregated graduate earnings, the subsidies for TICALtype schemes increase to about 30-55 per cent. The subsidy is between 3-18 per cent for our alternative ICLs, depending on the form of the real rate of interest incurred. These results show that there is a viable ICL alternative to TICAL, which are of greatest benefit for low levels of debt. When the debt is relatively large the subsidies of even well designed schemes can be as high as 50 per cent.

Keywords: income contingent loans; student loans; higher education financing (search for similar items in EconPapers)
JEL-codes: I00 I2 I20 I21 I22 I28 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-edu, nep-lab and nep-sea
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Related works:
Journal Article: Income contingent student loans for Thailand: Alternatives compared (2010)
Working Paper: Income Contingent Student Loans for Thailand: Alternatives Compared (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:595

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