Last week, I had the pleasure of talking with federal and provincial student aid leaders, in Toronto, about global developments in student assistance.  I told them there were a lot of interesting developments in different places, but they weren’t necessarily applicable to Canada because of different national contexts.

Context matters in student assistance – not everything we have here is available to student aid types elsewhere.  Here, for instance, are just a few of the things we take for granted when we make student aid policy:

1)      A government rich and trustworthy enough to run a lending program.  Not everyone has enough cash-on-hand to lend directly.  And of those that try to get banks to participate via loan guarantees, not all are trustworthy enough to be able to make a credible guarantee (if you were a bank, what value would you put on a loan guarantee from, say, Vanuatu?).

2)      Accurate need assessment.  Loans are based on family income, but how do you assess need when no one trusts the data?  In Japan, for instance, a nation of small shopkeepers, they won’t create a grant program because, fundamentally, they don’t believe enough people are telling the truth on tax forms, which form the basis of the need assessment process.

3)      Money shows up when government says it will.  When government here says money will be available in September and January, that’s when it shows up (individual SNAFUs aside).  But in much of Africa, government programs run hand-to-mouth.  If tax receipts are a little slow, the loans board doesn’t get the money until October, or maybe November.  Cue student riots.

4)      The ability to track and contact students.  At a minimum, you kind of need a phone directory.  Most of Africa and Asia, which got mass telephony with the cell phone, doesn’t have that.

5)      A credit bureau.  Valuable partly because they help track borrowers, they’re also important because without them, there are few consequences for defaulting.  In African countries where credit bureaus do not exist student loan programs lose over 50% of their loans.

6)      Privacy.  Some countries don’t have our pesky privacy laws.  Kenya, for instance, will publish the names of delinquent students’ in the paper.  It’s remarkably effective.

7)      A belief that recent graduates should have adult middle-class living standards.  As I’ve noted previously, in much of Asia, loan repayment periods are 4-6 years.  No one thinks this is onerous.  The attitude is, “you’re young and unmarried – pay this off, then move out of your parents’ house and start consuming”.

All of which is to say that technology, laws, institutions, and social conventions play a huge role in how student aid is administered.  We take it all for granted… but every once in awhile, we should step back and remember how fortunate we are that we can do so.