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Learning to Live with Loans? International Policy Transfer and the Funding of Higher Education

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  • Bruce Chapman
  • David Greenaway

Abstract

Over the last decade or so a number of OECD economies have migrated from providing higher education free at the point of consumption to levying user charges. However, rather than charges for tuition being paid up‐front, contributions have taken the form of income‐contingent loans. Graduates therefore contribute to the costs of their education, after they have graduated and when they are earning. The earliest example of this instrument was in Australia, with the introduction of the Higher Education Contributions Scheme (HECS). This paper argues that following their successful introduction in Australia, income‐contingent loans offer a good example of successful international policy transfer, with elements of that scheme being adopted and modified for use in New Zealand, South Africa and the United Kingdom. The paper reviews the conditions for successful policy transfer and discusses the reasons why the arrangements have not proliferated in non‐OECD countries.

Suggested Citation

  • Bruce Chapman & David Greenaway, 2006. "Learning to Live with Loans? International Policy Transfer and the Funding of Higher Education," The World Economy, Wiley Blackwell, vol. 29(8), pages 1057-1075, August.
    • Handle: RePEc:bla:worlde:v:29:y:2006:i:8:p:1057-1075
    DOI: 10.1111/j.1467-9701.2006.00822.x
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    References listed on IDEAS

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    1. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
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    Cited by:

    1. Elena Del Rey & Bertrand Verheyden, 2008. "Loans, Insurance and Failures in the Credit Market for Students," Working Papers 359, Barcelona School of Economics.
    2. Zahid Sobaci, 2009. "Regional Development Agencies in Turkey: Are They Examples of Obligated Policy Transfer?," Public Organization Review, Springer, vol. 9(1), pages 51-65, March.
    3. Gareth Bryant & Ben Spies-Butcher, 2020. "Bringing finance inside the state: How income-contingent loans blur the boundaries between debt and tax," Environment and Planning A, , vol. 52(1), pages 111-129, February.
    4. Jimenez, Emmanuel & Nguyen, Vy & Patrinos, Harry Anthony, 2012. "Stuck in the middle ? human capital development and economic growth in Malaysia and Thailand," Policy Research Working Paper Series 6283, The World Bank.

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