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Modelling Higher Education Financing Reform for Ireland

Author

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  • Aedin Doris

    () (Department of Economics, Finance and Accounting, Maynooth University.)

  • Bruce Chapman

    (Australian National University)

Abstract

This paper examines the feasibility of various alternative potential student loan schemes for Ireland. Using National Employment Survey data for 2006, we model the life-cycle earnings distribution for Irish graduates. We then use these estimates to simulate the effects of alternative types of student loans, including mortgage-type (government guaranteed bank) loans and income-contingent loans of various designs, incorporating participation and migration patterns into the simulations. The results show that mortgage-type loans entail unsustainably high repayment rates for low income graduates. Through the specification of several alternative income-contingent loan schemes, it is demonstrated that this approach to higher education financing is feasible in terms of affordability for graduates and with respect to implied government subsidies. There are some important policy design issues to be addressed and we conclude with some recommendations for a future Irish scheme.

Suggested Citation

  • Aedin Doris & Bruce Chapman, 2016. "Modelling Higher Education Financing Reform for Ireland," Economics, Finance and Accounting Department Working Paper Series n271-16.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n271-16.pdf
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    File URL: http://repec.maynoothuniversity.ie/mayecw-files/N271-16.pdf
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    References listed on IDEAS

    as
    1. Darragh Flannery & Cathal O’Donoghue, 2011. "The Life-cycle Impact of Alternative Higher Education Finance Systems in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 42(3), pages 237-270.
    2. Cansin Arslan & Jean-Christophe Dumont & Zovanga Kone & Yasser Moullan & Caglar Ozden & Christopher Parsons & Theodora Xenogiani, 2015. "A New Profile of Migrants in the Aftermath of the Recent Economic Crisis," OECD Social, Employment and Migration Working Papers 160, OECD Publishing.
    3. Chapman, Bruce & Lounkaew, Kiatanantha & Polsiri, Piruna & Sarachitti, Rangsit & Sitthipongpanich, Thitima, 2010. "Thailand's Student Loans Fund: Interest rate subsidies and repayment burdens," Economics of Education Review, Elsevier, vol. 29(5), pages 685-694, October.
    4. Chapman, Bruce & Lounkaew, Kiatanantha, 2015. "An analysis of Stafford loan repayment burdens," Economics of Education Review, Elsevier, vol. 45(C), pages 89-102.
    5. Chapman, Bruce & Liu, Amy Y.C., 2013. "Repayment burdens of student loans for Vietnamese higher education," Economics of Education Review, Elsevier, vol. 37(C), pages 298-308.
    6. Bruce Chapman & Tim Higgins, 2013. "The Costs of Unpaid Higher Education Contribution Scheme Debts of Graduates Working Abroad," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(3), pages 286-299, September.
    7. Flannery, Darragh & O'Donoghue, Cathal, 2011. "Lifecycle Impact of Alternative Higher Education Finance Systems in Ireland," IZA Discussion Papers 5626, Institute for the Study of Labor (IZA).
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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