Year: 2018
Type: article
Abstract: The use of income contingent loans (ICLs) for Higher Education (HE) students is becoming increasingly prevalent around the world. Using a model of simulated lifetime earnings for graduates, in this paper we show that the impact of the design of ICLs on the magnitude and distribution of government subsidies is highly dependent on the institutional setting. In particular, the average debt level as a share of average earnings is a key determinant of the impact of various policy parameters. The variance of earnings within the graduate population is also shown to be a determinant of ICL taxpayer costs. This paper is the first comparative exercise of impact of the design of ICLs in different settings, and the findings are highly relevant to countries looking to implement or reform their student loan systems.
Source: Economics of Education Review
Authors: Jack Britton, Laura van der Erve, Tim Higgins
Institutions: Institute for Fiscal Studies, Australian National University
Language: English
Subfield: Education
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,700
OpenAlex ID: W2809030623