Pros and Cons of Income-contingent Education Loans as a Tool to Finance Higher Education

Tuition fees, while controversial in Austria, are an important element of mixed regimes of higher education financing. In many countries, especially in the Anglo-Saxon world, income-contingent loans and tuition fees are used as an instrument to increase the share of private funding of higher education. An assessment of the pros and cons shows that income-contingent loans have advantages over other forms of financing such as loans without income-related repayment or graduate taxes. However, income-contingent loans depend for their efficiency and effectiveness on the specificities of their design and implementation.