Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76318 
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper No. 973
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Student loans, even income-contingent ones, are not optimal. Potential university students with the appropriate characteristics should be offered a scholarship, dependent on both need and merit. The award of the scholarship should be conditional on the choice of university degree, but students with a natural aptitude for studies that do not hold the prospect of a well paid job should not be pushed towards potentially more lucrative ones. The scheme should be financed by a graduate tax that re-distributes from the better paid to the academically more successful.
Subjects: 
scholarships
student loans
graduate tax
principal-agent
moral hazard
JEL: 
D82
I28
Document Type: 
Working Paper
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