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Title:Student loans repayment and recovery: international comparisons PDF Logo
Authors:Shen, Hua
Ziderman, Adrian
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3588
Abstract: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 schemes in 39 countries: how much of the original loan is an individual student required to repay (the repayment ratio) and what percentage of the total costs of loans schemes can the lending body expect to receive back in repayments (the recovery ratio)? The analysis shows considerable variation in the size of the repayment and recovery ratios across schemes. Moreover, many loans schemes exhibit sizeable built-in subsidies accruing to student borrowers - in over 40 percent of the schemes examined, the repayment ratio is 40 percent or less. Overall loans recovery is considerably lower. Policy implications of these findings are discussed together with a consideration of steps that may be taken to improve the financial outcome of loans schemes.
Subjects:Student financial aid
student loans
university subsidies
university funding
JEL:I22
Persistent Identifier of the first edition:urn:nbn:de:101:1-20080711131
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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