Abstract
Student loans are popular among university in support of young people to afford tuition fees, as US change its financial aid policy from grants to loans. Thus, the efficiency in student loan market is very important for the development of higher education, especially, human capital formation in this process. To complement the centerpiece for the relationship between human capital formation, credit market and economic performance in long run, a model which is derived from Boyd and Smith 1 to explore the role of information cost in the market. This work tried to indicate the fact that, higher development in credit market reduces the information cost in student loans, which would lead to higher contribution of human capital formation to economic growth.
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