Petr Wawrosz Herbert Heissler University of Finance and Administration Prague, Czech Republic

 1993: 123 thousands  2011: 357 thousands  Impossible trinity: larger quantity, higher quality and moderate public spending

 Decline importance of other factors: - raw materials - capitals tocks - technology  Human capital - private and public returns  Education for citisenships versus vocational training

 Private benefits are realized ex post  Owner of HC cannot give satisfied guarantee  How to overcome liquidity constraint : postpone payment to the period when borrower earn enough money  Possible ways: - Human Capital Contract - Graduate tax - Income Contingent Loan

 = a voluntary private contract between a student and an investor in which a student commits part of his future earnings to an investor for a fixed period of time in exchange for capital for financing education  Main parameters: - percentage of income and the repayment period  Disadvantages: - hidden income - adverse selection - willingness investors to invest money for lung run (bad example: MRU)

 State lend money to student (can give directly money to university)  Student return money in form of graduate tax

 Australia (HECS, HELP)  Great Britain  Government Participation

 What is necessary to explain (clearly stipulate): - The place of the student loan scheme or schemes in the total array of policy elements making up the complex sharing of higher educational cost. - The aim of the loan scheme. - The degree of subsidization (how much government subsidizes the loan). - The method of rationing or targeting (who recieves loans). - Default risk. - The manageability of repayments. - Method of disbursement.