A Review of Instruments for Student Loans in Tertiary Education

Debande, Olivier

doi:10.1111/j.1465-3435.2004.00174.x

Cited by 6 publications

(5 citation statements)

References 17 publications

(15 reference statements)

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“…Cost-sharing potentially affects the nature of HE governance and the relationship between students, their teachers, and HE institutions (HEIs) in ways that might or might not be desired depending on political persuasion. Substantial tuition fees compel potential students to estimate their future income under different enrolment options (Debande, 2004), and possibly to obtain a loan. Institutions may need to introduce new administrative and financial processes if they collect the fees themselves, and if fees are variable, make marketing decisions and assess the relative profitability of different courses.…”

Section: Separation Of Cost-sharing and Marketizationmentioning

confidence: 99%

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Barakat

2017

High Educ Policy

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Current higher education policy debates in Europe are increasingly focusing on raising the share of private funding. To date, policy proposals have centred on a relatively small number of alternatives, namely full public funding, tuition fees, either up-front or delayed and income-contingent, or a surtax on graduate incomes. Here, I present an alternative that, to my knowledge, has not been suggested previously, but sidesteps some important objections against other forms of private contributions. The basic idea explored here is to increase the statutory retirement age for higher education graduates relative to nongraduates. In principle, the resulting decrease in future public pension liabilities can be converted into increased funds for present spending on higher education. In this first discussion of the above proposal I consider important caveats, perform an order-ofmagnitude estimate of whether the financial implications of Deferred Graduate Retirement (DGR) are comparable to those of tuition fees, and discuss advantages and disadvantages compared to more established policy options. I conclude that, at least in the continental European context, DGR promises a number of economically and politically desirable properties compared to established alternatives, and deserves more serious investigation. Keywordshigher education, fees, funding, access, retirement within a framework of endogeneous decisions regarding labour supply, for example. But also in that such a limited view ignores real-life cognitive and behavioural effects. In relation to HE participation, manifest behaviour is well-documented to deviate from strictly economic rationality. This has been noted with respect to mobility (Wakeling and Jefferies, 2013), take-up of financial aid or the repayment schedule of student debt (Chowdry et al., 2012), and the 'haphazard post-secondary choice process' in general (Scott-Clayton, 2013, 75). In his study of decision-making among HE applicants, Usher (2010) found 'there was not a single case of a student being able to show in concrete terms that they had appraised their chosen HE options in terms of both costs and benefits' (p 69). Policy-making with respect to HE funding is likewise 'less the result of rational analyses and more the outcome of negotiation among stakeholders with competing interests' (Marcucci, 2013, 9). It matters how issues are framed, communicated, and justified (Usher, 2010). Accordingly, policies that are equivalent in accounting terms can interact quite differently with perceptions, attitudes, and actual participation decisions.Naturally, there is no empirical evidence yet on how prospective HE entrants perceive and respond to the idea of DGR. However, given well-known general cognitive biases (e.g.'sticker price shock', or 'hyperbolic discounting') it seems highly likely that DGR will have a different effect on HE participation behaviour than fees or a graduate tax. To make the case why DGR might actually be preferable, it is therefore necessary to discuss the issue in terms of HE polic...

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Section: Separation Of Cost-sharing and Marketizationmentioning

confidence: 99%

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Barakat

2017

High Educ Policy

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“…In our specific field of research, Ziderman (2004) argued that 'a given student loans scheme will need to be evaluated in the context of the central objective[s] that it is designed to achieve' (p. 34). The literature (Debande, 2004;Johnstone, 2009;Ziderman, 2002) identifies four main categories of problems.…”

Section: The Necessary Coherence Between Goal and Designmentioning

confidence: 99%

“…For these reasons universities might involve the students in meeting the higher education costs (Debande, 2004;Jongbloed, 2006). This objective could be split into two scenarios:…”

Section: Model B: Increasing Universities' Fundingmentioning

confidence: 99%

Models for determining the efficiency of student loans policies

Dente

Piraino

2011

Journal of Higher Education Policy and Management

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For both efficiency and equity reasons, student loans schemes have been introduced by several countries. Empirical work has been carried out in order to measure the effectiveness of these policies, but, with few exceptions, their results are not comparable because of their concentration on specific aspects. The present work suggests a comprehensive framework for the analysis of the effectiveness of student loans policies. Starting with the identification of the different possible goals of a loan scheme and taking into consideration the main elements of the policy design, the paper builds a system of four ideal types suggesting appropriate effectiveness indicators for each of them.

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“…Financial aid in the form of educational loans is, thus, a relevant instrument for financing a degree for millions of students, mainly in the Anglo-Saxon higher education model (e.g. Debande, 2004). Nevertheless, around the world, student loan debt is rising as growing numbers of students rely on student loans to pay for their higher education (De Gayardon et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

Attitudes of college seniors toward graduate student loan debt: the role of financial education

Salas-Velasco

2024

JFEP

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Purpose This paper aims to examine prospective graduate students' attitudes toward educational loan borrowing in an experimental setting. Design/methodology/approach Participants were randomly assigned to two treatment groups and one control group. Subjects in experimental group 1 received financial education: a short online course on the economic viability of getting a master's degree and how to finance it with a graduate student loan, while subjects in experimental group 2 received financial education along with information on the availability bias. Findings Relying on a control group in the assessment of financial literacy education intervention impacts, this research finds positive causal treatment effects on individuals’ attitudes toward debt-financed graduate education. In comparison to the control group, experimental subjects perceived the possibility of going into debt with a graduate loan to complete a master’s degree as less stressful and worrying. Practical implications This study has important educational policy implications to prevent students from stopping investing in human capital by perceiving educational loan debt as something stressful or worrying. The results can help potential (and current) grad students develop a feasible financial plan for graduate school by encouraging higher education institutions to implement educational loan information and financial education into university seminar courses for better graduate student loan decision-making. Originality/value Student attitudes toward debt have been analyzed in the context of higher education, but only a few researchers internationally have used an experimental design to study personal financial decision-making.

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A Review of Instruments for Student Loans in Tertiary Education

Cited by 6 publications

References 17 publications

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Models for determining the efficiency of student loans policies

Attitudes of college seniors toward graduate student loan debt: the role of financial education

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