Scholarships or Student Loans? Subsidizing Higher Education in the Presence of Moral Hazard

Alessandro Cigno and Annalisa Luporini ()

No 973, CESifo Working Paper Series from CESifo

Abstract: Student loans, even income-contingent ones, are not optimal. Potential university students with the appropriate characteristics should be offered a scholarship, dependent on both need and merit. The award of the scholarship should be conditional on the choice of university degree, but students with a natural aptitude for studies that do not hold the prospect of a well paid job should not be pushed towards potentially more lucrative ones. The scheme should be financed by a graduate tax that re-distributes from the better paid to the academically more successful.

Keywords: scholarships; student loans; graduate tax; principal-agent; moral hazard (search for similar items in EconPapers)
JEL-codes: D82 I28 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-edu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo_wp973.pdf (application/pdf)

Related works:
Journal Article: Scholarships or Student Loans? Subsidizing Higher Education in the Presence of Moral Hazard (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_973

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().