STUDENT LOANS IN PRACTICE: Benefits and Pitfalls of Loans Schemes in Asia

This chapter examines and compares student loans schemes where present, in some 15 countries, in the Asian region. In particular, it draws on and updates the author’s earlier studies of loans schemes with the inclusion of India, Indonesia, Japan, Malaysia, New Zealand, Singapore, and Vietnam. Commonalities and differences across loans schemes in the region are examined. First, in terms of the rationale for their introduction and loan mechanisms employed, including funding sources, loan recipient selection and targeting, interest level charged, repayment schedules, loans subsidies, and repayment regimes-whether based on annual income (income contingent loans) or pre-fixed (mortgage type) repayments. This is followed by a scrutiny of outcomes, in terms of success and shortcomings in meeting stated financing and social objectives. Attention is paid to overall financial viability of schemes, the issue of student debt, and whether there is a “best practice” loans scheme suitable for the Asian context.