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Category: Student Aid

The Return of Income-Contingency

The idea of income-contingent repayment (ICR) of student loans has been with us for a few decades now.  In 1945, Milton Friedman advocated something like an ICR loan as a way of reducing the risk associated with educational investment.  In 1971, nobel-prize winner, James Tobin, developed an ICR for use at Yale University.  The first national-level ICR was in Australia, which introduced its Higher Education Contribution Scheme in 1988; the idea quickly spread to New Zealand, the UK, and Sweden.

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March 8, 2013 No Comments

The Uselessness of Automatic Entrance Scholarships

A couple of weeks ago, HEQCO released The Impact of Scholarships and Bursaries on Persistence and Academic Success in University, in which Martin Dooley, Abigail Payne, and Leslie Robb examined the effects of university merit scholarships in terms of grades, persistence, and degree completion.  The paper’s technical analysis was excellent, but the policy analysis wasn’t as sharp as it could have been. Most scholarships these days can be described as “automatic” awards – if you have an 80% average in high school,

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January 25, 2013 2 Comments

Islamic Student Loans

READER’S NOTE: HESA does not have connections to any organizations that offer interest-free loans.    As-salaam Alaikum. Every once in awhile, someone in the student movement hears tell of interest in Islam being prohibited, thinks about student loans for a microsecond, and then comes up with the idea that student loans are “unislamic” and, hence, culturally inappropriate.  This, in the past, has led some in Canada to claim that the whole student aid system needs to be revised and made more

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December 12, 2012 14 Comments

Manageable Debt, Part 2

Yesterday, we looked at the principles underlying the discussion on manageable student debt; today we examine how Canadian governments try to help students manage debt, and whether or not their efforts are as efficient as they could be. Manageable debt loads are a function of three things: total debt, interest rates, and student income.  The last of these three is only vaguely susceptible to government control, but governments can control program interest rates and total debt loads through direct subsidies. 

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December 11, 2012 No Comments

Manageable Debt

One of the big questions in student loans these days concerns “manageable debt”.  How much debt is manageable, exactly?  And how do we best help borrowers whose debt is unmanageable? As nearly everyone agrees, manageable debt is a flexible concept. For someone with no income, pretty much any amount of debt is unmanageable.  As income rises, however, an increasing amount of debt can be serviced.   Interest rates and repayment terms matter too, of course;  any established debt-to-income ratio is a

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December 10, 2012 No Comments
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One Thought to Start Your Day is our founder and CEO Alex Usher’s popular daily blog, brimming with up-to-the-minute insights and informed opinions on today’s higher education industry.

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