Student financing of higher education

The need for further investment in higher education, combined with fiscal constraints and concerns about accessibility and affordability, has placed the higher education financing system in Ireland in focus. In this context, this chapter first discusses the advantages and disadvantages of various higher education funding systems, both state and student based. The results of two separate empirical analyses that examine the introduction of several alternative student financing systems in Ireland are then presented. These raise equity concerns related to a graduate tax scheme and default concerns with a mortgage-style loan system. They also show that an income contingent loan (ICL) system for Ireland is workable, although careful consideration must be given to the setting of interest rates and the issue of graduate emigration in implementing such a system.