Student loans

Student Loans Repayment and Recovery: International Comparisons

Student Loans Repayment and Recovery: International Comparisons Student loans schemes are in operation in more than seventy countries around the world. Most loans schemes benefit from sizeable built-in government subsidies and, in addition, are subject to repayment default and administrative costs that are not passed on to student borrowers. We probe two issues in this paper, for 44 loans schem...

Risky College Investment under Alternative Bankruptcy Regimes for Student Loans

I consider the implications of alternative bankruptcy regimes for student loans in a heterogeneous model of life-cycle earnings and risky human capital accumulation. Findings suggest that the ability level of high-school graduates drives the decision to enroll in college, while the initial human capital level is crucial for completing college. Also, the correlation between parental wealth and a...

The Unsupportable Cost of Variable Pricing of Student Loans

Insuring Student Loans Against the Risk of College Failure

Participants in student loan programs must repay loans in full regardless of whether they complete college. But many students who take out a loan do not earn a degree (the dropout rate among college students is between 33 to 50 percent). We examine whether insurance against college-failure risk can be offered, taking into account moral hazard and adverse selection. To do so, we develop a model ...

Student Loans in Thailand: From Social Targeting to Cost Sharing

Privatization has become the mantra of the day everywhere, including the case of higher education. In addition to the above-mentioned methods of financial privatization, governments in many countries seem increasingly to be getting wedded to the neoliberal philosophy that centers on the role of markets in every sphere. Governments promote the growth of private higher education institutions—most...