Abstract
Currently China is experiencing unprecedented growth in higher education enrolments, with this trend set to continue. Whether higher education financing policy is able to facilitate this expansion is a critical issue for both education outcomes and economic growth. Using cross-sectional earnings data from the Chinese Household Income Project we find that a significant proportion of low-income graduates have a high likelihood of experiencing financial difficulties with current loan arrangements, implying high levels of financial hardship, a reliance on family members to meet repayments in order to avoid difficulties, and for some, default. In contrast we show that a properly designed income-contingent loan scheme has the potential to significantly mitigate, even eliminate, these concerns without attendant high budgetary costs. Our findings have important policy implications for Chinese higher education financing.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.