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Title:A Simulation of an Income Contingent Tuition Scheme in a Transition Economy PDF Logo
Authors:Vodopivec, Milan
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1247
Abstract:The paper takes advantage of exceptionally rich longitudinal data on the universe of labor force participants in Slovenia and simulates the working of an income contingent loan scheme to partly recover tuition costs. The simulations show that under the base variant (where the target cost recovery rate is 20 percent and the contribution rate is 2 percent), 55 percent of individuals would have repaid their entire debt within 20 years; 19 percent of individuals still would not have repaid any of their debt after 20 years; and the "leakage" of the scheme due to uncollected debt would have been 13.5 percent of total lending. By piggybacking on existing administrative systems, implementation costs would be minimal, amounting to less than 0.5 percent of collected debt.
Subjects:income contingent loan
education
tuition
simulation
JEL:J24
C15
I28
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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