Higher Education

, Volume 57, Issue 3, pp 315–333 | Cite as

Student loans repayment and recovery: international comparisons

  • Hua Shen
  • Adrian Ziderman


Student loans schemes are in operation in more than seventy countries around the world. Most loans schemes benefit from sizeable built-in government subsidies and, in addition, are subject to repayment default and administrative costs that are not passed on to student borrowers. We probe two issues in this paper, for 44 loans schemes in 39 countries: how much of the original loan is an individual student required to repay (the “repayment ratio”) and what percentage of the total costs of loans schemes can the lending body expect to receive back in repayments (the “recovery ratio”)? The analysis shows considerable variation in the size of the repayment and recovery ratios across schemes. Moreover, many loans schemes exhibit sizeable built-in subsidies accruing to student borrowers—in over 40% of the schemes examined, the repayment ratio is 40% or less. Overall loans recovery is considerably lower. Policy implications of these findings are discussed together with a consideration of steps that may be taken to improve the financial outcome of loans schemes.


Student financial aid Student loans University finance University subsidies 



Hua Shen was Fred and Barbara Kort Post-doctoral Fellow at Bar-Ilan University when this research was carried out. The authors acknowledge the helpful comments on an earlier draft provided by Miriam Krausz and Shoshana Neuman.


  1. Anashvili, V. V. (2006). Student loans analytical report. In Conference on Student Loans in Russia. Ditchley Park, Oxfordshire, UK, January 27–29, 2006.Google Scholar
  2. Carlson, S. (1992). Private financing of higher education in Latin America and the Caribbean. Latin America and the Caribbean Technical Department, Regional Studies Program Report No. 18. Washington, DC: The World Bank.Google Scholar
  3. Chapman, B. (2005). Income contingent loans for higher education: International reform. Centre for economic policy research, Research school of social sciences, the Australian National University, Discussion paper No. 491. Canberra.Google Scholar
  4. Chapman, B., & Ryan, C. (2002). Income-contingent financing of student charges for higher education: assessing the Australian innovation. The Welsh Journal of Education, 11(1), 64–81.Google Scholar
  5. Chung, Y. P., & Hung, F. S. (2003). Student loans in Hong Kong: A perspective of loans agency. The Journal of Higher Education, 24(1), 45–52 (in Chinese).Google Scholar
  6. Johnstone, D. B. (1986) Sharing the costs of higher education: Student financial assistance in the United Kingdom, the Federal Republic of Germany, France, Sweden and the United States. New York: The College Board.Google Scholar
  7. Johnstone, D. B. (2000). Student loans in international comparative perspective: Promises and failures, myths and partial Truths. Buffalo, NY: University at Buffalo. Center for Comparative and Global Studies in Education,
  8. Johnstone, D. B. (2006). Income contingent loans and graduate taxes: Can they work in developing and transitional countries? In D. B. Johnstone (Ed.), Financing higher education: Cost-sharing in international perspective. Rotterdam: Sense Publications.Google Scholar
  9. Johnstone, D. B., & Aemero, A. (2001). The applicability for developing countries of income contingent loans or graduate taxes, with special consideration of an Australian HECS-Type income contingent loan program for Ethiopia. Buffalo, NY: University at Buffalo. Center for Comparative and Global Studies in Education,
  10. Usher, A. (2005). Global debt pattern: An international comparison of student loan burdens and repayment condition. Toronto: Educational Policy Institute.Google Scholar
  11. Vossensteyn, H. (2004). Student financial support: An inventory in 24 European countries. Enschede, the Netherlands: Centre for Higher Educational Policy Studies (CHEPS).Google Scholar
  12. Wandiga, S. (1997). Capacity building and institutional development in higher education in Kenya: A case study of public universities investment project (1991–1994). International Institute for Educational Planning. Paris: UNESCO.Google Scholar
  13. World Bank. (2004). World development indicators. Washington, DC: The World Bank.Google Scholar
  14. Ziderman, A. (2002). Alternative objectives of national student loan schemes: Implications for design, evaluation and policy. The Welsh Journal of Education, 11(1), 37–47.Google Scholar
  15. Ziderman, A. (2003). Student loans in Thailand: Are they effective, equitable, sustainable? International Institute for Educational Planning. Paris: UNESCO.Google Scholar
  16. Ziderman, A. (2004). Policy options for student loan schemes: Lessons from five Asian case studies. International Institute for Educational Planning. Paris: UNESCO.Google Scholar
  17. Ziderman, A., & Albrecht, D. (1995). Financing universities in developing countries. Stanford Series on Education and Public Policy. London: Falmer Press.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  1. 1.Graduate School of EducationPeking UniversityBeijingChina
  2. 2.Faculty of Mathematics and Computer ScienceHubei UniversityWuhanChina
  3. 3.Department of EconomicsBar-Ilan UniversityRamat GanIsrael
  4. 4.IZABonnGermany

Personalised recommendations