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Tuition fees are charges levied upon students, or upon students and their parents, that cover some portion of the underlying costs of higher education. Tuition fees are related to the institutional costs of instruction and are thus distinct from charges related tothe costs of student living, or maintenance--e.g., room, board, laundry, transportation--even though such maintenance charges may also be levied upon students or parents by the institution if it operates dormitories and dining halls, and even though the student or family, as paying parties, may not differentiate between these charges. Occasionally, particularly in the United States, an attempt is made to differentiate between "tuition" and "fees," with "fees" referring to charges earmarked for certain specialized out-of-classroom services such as registration, access to computers, or admittance to institutionally-sponsored athletic and cultural events. This section will treat all such charges -- provided they are not discretionary and are not related to student maintenance costs such as room and board--as "tuition fees."
Nearly all cost related to higher education, including the underlying costs of instruc-tion as well as the costs of student living, are borne by some combination of students, parents, and taxpayers. Philanthropists may also bear a share, but endowment earnings and current gifts are significant in reference to basic institutional operating costs mainly in the U. S. high-cost private higher education sector. Businesses or industrial or governmental agencies may also seem to be able to bear some portion of the costs of higher education. However, such contributions may be viewed as merely passed on to their consumers and thus borne ultimately in a fashion quite indistinguishable from the burden of the general taxpayer (Johnstone 1986).
Thus, the principal issues surrounding tuition fees relate to the division of the burden of covering instructional costs between the government, or the taxpayer, on the one hand and the parents and/or students on the other. This paradigm applies equally to private higher education sectors, where governments (taxpayers) can choose to subsidize private universities directly, presumably promoting lower tuitions for all, or to subsidize only needy students, allowing institutions to recover full costs from those who can pay, while maintaining access to those whose parents cannot or will not pay.
Once a determination is made that some portion of costs may appropriately be passed on to students and/or parents, it becomes necessary to address such questions as:
1. Setting Tuition Fees for Public Higher Education
The first question in the consideration of public tuition fees is whether there ought to be any at all, or whether all institutional costs should be borne by the State, or general taxpayer. If there is to be tuition, public policy must establish its appropriate amount, the differentiation of tuition fees by, e.g., course or level of study, and the means by which tuition fees should increase over time.
1.1 The Case for No Tuition Fees
Most of Western Europe and most nations that currently or recently adhered to some form of Socialist-Marxist ideology have, until the mid-90's, had virtually no private higher education sector and no tuitions in their publicuniversities. Belgium and the Netherlands have substantial private, yet publicly-financed, sectors, and thus only minimal tuitions. The United Kingdom has tuition, but it has been paid automatically by the government for nearly all British students and thus does not, as ofthe mid 90's, provide for any substantial student or parent role in the financing of institutional costs. The French government continues to toy with the idea of fees,butso far France, like Germany, continues to provide university education without tuition.
Russia and the nations of the former Soviet Union and Socialist East Europe continue to treat higher education as thefinancial responsibility of "the state." Yet Marxism-Lenninism is in shambles as any sort of guide to public finance or the appropriate role of the state in the economic lives of the citizenry. Thus, although tuition is still, by 1996, technically forbidden by the RussionConstitution, the institutions and the government have alloweda lophole in the form of students falling just short of the regular admissions cut-off being admitted with the payment of tuition.
China, meanwhile, by the mid-90's has officially abandoned the traditional Marxist reticence toward tuition and fees, and has proclaimed it legal andappropriate for students and their parents to bear a part of the costs ofhigher education.
Universities in Francophone Africa generally have no tuition fees, while most other developing nations of Africa, Asia, and Latin America, while frequently with significant private higher education sectors, generally have zero or minimal tuition in their public sectors.
The absence of tuition--i.e., full taxpayer subsidization of the public universities--may be defended on one or more of the following points. First, proponents of no tuition fees emphasize the predominance of the public benefits of higher education--its worth to all citizens, rather than just to those who attended as students, through its contributions to economic development, political democracy and stability, civic enlightenment, and the general quality of life. Because all benefit, all should pay. Any tuition could begin to limit participation and thus detract from this public good.
Second, any tuition, even if supposedly cushioned by means-tested grants for students from low-income families, may still discourage enrollment and persistence from low-income or rural or ethnic-minority youth, thus diminishing the social goal of equality as well as the overall educational level of the populace.
Third, student maintenance costs--room, board, travel, clothing, laundry, entertain-ment--are already high ($5,000-$7,000 annually is a conservative estimate for Europe and North America) and already beyond the reach of most students alone, and even of many parents. Less seen, but nonetheless real, are the costs of foregone earnings during the student years, also borne by students. The only way for even a portion of instructional costs to be shared by the student-family unit is through a public policy of continued parental responsibility for the higher education expenses of their children--a policy already disavowed in Scandinavia and under considerable stress at least in the United States and in other affluent nations due to the increased median age of students and the diminished certainty of a stable two-parent family on which to lay the financial burden of the children's higher education. In short, substantial expenses are already being borne in most countries by most students, even without tuition. The only way a significant tuition burden, in addition, is even contemplatable is through a policy of prolonged financial dependence on parents -- and such an expectation is at least problematic.
Finally, the principal immediate beneficiaries of free public higher education--students and friends and families of students--are enormously powerful politically, by virtue of their predominantly middle- and upper-middle class backgrounds, their status as intellectual and social elites, and their heightened ideological sensitivities and generally greater proclivity to disruptive or even violent political behavior. Thus, the inauguration of tuition where such a policy does not yet exist is a politically difficult act, regardless of its merits.
1.2 The Case for Tuition Fees
The United States, Canada, Japan, India, South Korea, the Philippines, and some of the Anglophone nations in Africa, have national (and sometimes state) policies requiring moderate tuition fees in most or all public higher educational institutions. China has only recently inaugurated a national tuition poicy. "Moderate" suggests an amount that is at least financially significant to both the institution and to the family--say $300-$500 at a minimum--but substantially below full cost and thus still reflecting a considerable taxpayer subsidy at the average and upper levels--say, $1,500 and up. Australia has reintroduced tuitions, and there have been many proposals for moderate tuition fees for most countries that as yet have none. The principal case for some tuition fees in the public sector is that the benefits of higher education go at least substantially to the students and are realized in the forms of, e.g., higher lifetime earnings, enhanced status and privilege, and the benefits of increased career options and general life chances. Particularly if the students and parents would pay at least some portion if they had to (which is, after all, the most important signal of the value placed on a good or service), it seems only fair to expect the students or families to pay at least something rather than to impose the burden on all general taxpayers, most of whom will not so benefit.
The case for some tuition is more compelling to the degree to which the underlying costs of the higher education partaken of--and, in the absence of any tuition, borne entirely by the taxpayer -- are distributed very unevenly, with the most costly (most subsidized) higher education, such as advanced degrees in medicine or engineering, going overwhelmingly to the children of the middle- and upper-middle class elites, while the shorter and less-expensive forms of higher education, such as the American Community College, the Japanese Tanki Daigaku, the German Fachhochschule, the British Poly-technic, or the French Instituts Universitaires de Technologie are attended by middle- and working-class children, often of parents who did not themselves attend an institution of higher education. The case is even more compelling to the degree to which the taxes that support higher education tend to be regressive (e.g., most sales, consumption, value-added, and property taxes) and thus fall disproportionately on those who are disproportionately underrepresented in the universities. Proponents of tuition in public universities maintain that some portion of the tuition revenue, coming from those students and parents who will willingly pay if required to, can be the source of means-tested grants to enhance access to higher education from low-income or ethnic-minority or otherwise underserved populations. Thus, tuition coupled with means-tested grants, which in effect distributes the taxpayer-borne subsidy in such a way as to maximize access for the available resources, is claimed to be both a more efficient and a more equitable use of public funds.
Tuition is also claimed by proponents to add other benefits commonly ascribed to the workings of a free market. Where there are many institutions competing for students, the need to recover some portion of the costs from students or families can inculcate more cost consciousness and consumer (student) orientation on the part of institutions. It may also lead to greater seriousness on the part of the student. Finally, public universities that are only partly subsidized provide greater opportunities for the coexistence of a private and a public higher education sector and hence of even greater diversity and responsiveness.
Finally, tuition revenue is often treated in such a way as to give the university more discretion over its subsequent expenditure than might have been the case with outright grants from a national or state/provincial treasury. Even in the United Kingdom, for example, where tuitions are paid automatically and directly by the Government to the Universities and Polytechnics for all eligible home students, these funds are considered "special" and more discretionary than are the basic institutional grants and contracts.
1.3 The Appropriate Level of Tuition Fees
Tuition fees, where found in the public sector, tend to be based more on history (i.e., what has been charged over the years, and especially in the most recent year), on fiscal considerations (i.e., how much revenue is available from non-tuition sources, mainly taxes, and how much more is truly needed by the universities), on political grounds (what is likely to be the outcry from students, parents, or the political opposition from a particular tuition or tuition increase) and on consumer acceptance (i.e., how much can/will most students and parents in fact pay) than on the basis of any coherent theory of cost sharing. If set too high, too many students will require means-tested grants in order to preserve access, negating the net revenue benefit of the marginal tuition dollar. If too low, the revenue may also seem insufficient to justify the political and administrative cost of its periodic adjustment and all of the financial apparatus required to collect it, defer it for students financially unable to pay it, and to adjust cost-of-living grants for the added expense of the tuition fees.
Tuition fees in the U. S. public sector have historically been roughly 25 percent of total institutional costs (Halstead 1989, Ludwig 1989, Carnegie Commission 1973 and 1974). The Carnegie Commission on Higher Education recommended for the United States in 1973 a policy of slowly increasing tuition as a proportion of total costs from its level then, estimated to be about 24 percent, to a recommended steady-state level of one-third of costs. The Commission's recommendation never became policy as such, but the l970s and '80s saw an increase in tuition as a proportion of total revenue, and also the beginning of state tuition policies linking tuitions to some fraction of underlying costs. By 1988, Connecticut, Florida, Georgia, Maryland, Minnesota, New Jersey, Tennessee, West Virginia, and Wisconsin had such a policy (Mullen 1988).
Public four-year college and university tuition fees in the United States for in-state undergraduates in 1993-94 averaged $2527. Just over 40 percent of public four-year institutionscharge less than $2000, but almost one-fourth charge between $3000 and $5000. Tuitions at public two-year colleges in the United States are considerably lower, averaging in 1993-94 only $1229, but tuitions have been rising rapidly here, too (The Collge Board.)
Tuitions in Canada also vary by province and by institution, but are similar to, although somewhat lower than, U. S. public tuition fees. Ontario tuition fees for general arts and science in 1988-89 were C$1411 ($1,130), which were about one-fourth of operating costs, although tuition revenues constituted a lower proportion of costs for other programs (Stager 1989).
Tuitions in Australia, having been phased out in 1974, are to be reintro-duced in 1989, at an amount equal to 20 percent of costs, or A$1800 ($1,333) (Wran 1988). It was assumed at the conception of the new tuition plan that most students would repay through "tax debits" -- a form of graduate tax, much like an income-contingent loan, through which students earning above the Australian mean income level would pay an income surtax until their deferred tuitions were repaid, with interest. Early indications, however, are that a greater than expected number of Australian students are paying "up front," as though facing an ordinary tuition charge, with the inducement of a 15 percent discount.
Public sector tuition fees in Japan in 1988 are about Y200,000 ($1,600), which is 15-20 percent of the costs of instruction (Kaneko 1989). This level has risen sharply in recent years as direct taxpayer-based assistance has diminished and as the quantitatively predominant private sector has continued to raise sharply its tuitions.
Tuitions in the United Kingdom were £607 ($1,140) in 1989-90 and are scheduled to move to £1,600 ($3,000) by 1990-91. Because tuitions are covered by grants (non means-tested) for nearly all British students, neither the absolute level nor the increase in tuitions is of consequence to the relative share of instructional costs borne by students and parents or by the taxpayer. And because the increased tuition grants will be shifted out of the Government's block grants, the universities, polytechnics, and colleges also stand neither to gain nor to lose in the aggregate. The purpose of the tuition, and its planned increase, is to provide a clear incentive to institutions to enroll more students -- at a minimal but presumably sufficient per-student cost to the British taxpayer (Department of Education and Science 1989).
1.4 Responsibility for Setting Tuition Fees
Public tuition fees can be established by government either directly through law or through a national or state ministry, or indirectly through the appropriation of an amount of tuition revenue that requires a particular level or schedule of tuition fees to be achieved. Government can also merely encourage a particular level of tuition, leaving its actual establishment to the universities, by presuming a particular level of tuition in setting the governmental grant, allowing the university to set a lower tuition, but effectively losing the revenue. Or, the government can set a maximum tuition--knowing that universities, facing fewer incentives against tuitions, will probably set fees at or very close to this amount.
Public universities may, in some states or provinces, be legally free to establish, hold, and expend fees seemingly on their own volition. However, the underlying governmental appropriation must still presume some level of tuition revenue, and it is difficult to imagine a government or a ministry long tolerating the accumulation of large unspent tuition revenue balances, or the unrestrained rise of university expenditures based on unnecessarily high -- and presumably politically unpopular -- tuition fees.
1.5 Increasing Tuition Fees
The principal issue in public tuition fees is not their absolute level at any given point in time, but their increase over time as underlying instructional costs increase due to rising wages, salaries, and other inflationary cost pressures peculiar to higher education. Per-student costs of instruction in higher education will tend to increase over time at a rate equal at least to the rate of increase of wages and salaries in the economy generally -- that is, at a rate equal to the prevailing rate of inflation plus the rate of real growth in the economy. Because revenues to cover the basic costs of instruction may be presumed to come either from tuition or governmental (taxpayer) sources, the failure of tuitions to increase at this same rate will require either additional governmental revenues (i.e., taxpayer-borne funds increasing at an even greater rate), or a less-than-break-even increase in university expenditures, requiring some reductions in employment or expenditures, or some stop-gap revenue measures such as borrowing from reserves or carrying forward deficits.
Thus, a useful public tuition policy must primarily address the rationale for, and means of arriving at, annual or at least periodic tuition increases. Examples of such policies (See SHEEO 1988, Halstead 1989, Stager 1989) would be for tuition fees to increase annually at a rate or amount not to exceed:
In fact, public sector tuition and fee revenues in the United States, Canada, and Japan have increased on the average at rates somewhat higher than that required to maintain a constant share of cost burden borne by the student and/or parent. The advantage to a tuition increase policy is that such a change would come about, if at all, only purposefully and not as a politically expedient solution to short-term governmental fiscal pressures.
1.6 Differential Tuition Fees
Public sector tuition fees typically vary according to level, type, or cost of program, as well as resident status, in addition to variation by individual institution. For example:
By Level: Tuitions in some United States' public universities are lower for the first two undergraduate years, higher for the last two, and usually higher still for post-baccalaureate study. Part of the rationale for such a differentiation may be the relationship to cost: lower division instruction, with generally larger classes and more extensive use of low-paid adjunct faculty and even graduate students, almost certainly costs less than more advanced studies, usually with smaller classes and more costly faculty, thus rationalizing a tuition differential. In addition, students who drop out after only a year or two probably receive even less than proportionate returns in the form of career and income opportunities, and it may thus be appropriate for them to have to pay less. (Because college drop-outs in the United States also have very high student loan default rates, it has been proposed to lower or to eliminate tuitions in the first year or two of a public college, particularly for those students deemed in "high risk" of dropping out before a degree, as one way of reducing defaults and lessening the onus of debt burdens on those least able to repay.) Finally, insofar as a very low tuition is important to attract otherwise ambivalent students to attempt higher education, it may be reasonable to minimize public tuitions in the first year or two, but then to lower the subsidy (i.e., raise the tuition) after the students are well established in their third year and less in need of such large financial inducements.
By Program Cost: Tuitions can also vary by program cost, with higher tuitions charged to typically high-cost programs such as engineering, medicine, dentistry, and architecture. These most expensive programs in the United States are also largely post-baccalaureate, thus coupling cost and level as reinforcing determinants of tuition differentials. There has been great resistance, however, to differential tuitions by program at the undergraduate level (See Karelis 1989).
By Residency: Public tuition fees are generally higher for students whose families do not reside in the nation, state, or province that is funding the costs of instruction -- unless reciprocal agreements can be worked out to allow relatively equal flows both ways across a state or provincial border. The United Kingdom, for example, raised tuition fees to overseas students in 1980 to virtually full cost, and such students by the end of the 1980s were being recruited assiduously by universities and polytechnics as a source of institutional revenue. In the United States, out-of-state, or non-resident, tuitions are higher at nearly all public colleges and universities, generally by a factor of two to three times the in-state rate. The Universities of Michigan and Vermont, reflecting their great popularity to affluent non-residents, who often apply to these elite public universities as alternatives to very expensive private colleges or universities, charged non-residents in 1988-89 $10,386 and $10,776 respectively -- well above actual per-student costs by most calculations, and clearly reflecting their favorable position in a seller's market.
At the same time, state or provincial residential status is difficult to attribute with fairness and consistency, particularly in countries in which families tend to be geographically mobile, where undergraduate students tend increasingly to be, or to want to become, independent from their parents, and where legal residency may be distorted by considerations of tax obligations and benefit entitlements (Carbone 1974).
By Ability to Repay Student Debt...or By Assumed Future Earnings Potential: Because higher tuitions will have to be met either by parents or by future employers or by the students themselves through loans to be repaid during their earning years, it is generally thought more acceptable to charge higher tuitions for programs leading to highly remunerative professions (e.g., medicine, dentistry, advanced management, engineering, or law) even apart from their generally (but not always) higher costs. Similarly, it is often believed appropriate to hold tuitions down, particularly as a proportion of underlying costs, for programs leading to socially worthy but less remunerative professions such as teaching, research, theology, or social work, even when such programs at the advanced level may be quite costly.
From all of the above, one can expect to find lower public tuitions in lower-cost institutions (e.g., two-year and four-year comprehensive or polytechnic colleges), for programs leading to a first degree, and especially for the first year or two of study. One can expect higher public tuitions for advanced professional study leading to highly remunerative careers, and especially for out-of-state or foreign students, and at the most elite, highly sought-after universities.
2. Setting Tuition Fees For Private Institutions
Tuition is the principle source of revenue for private institutions, supplemented by governmental (taxpayer-borne) block or capitation grants in some states or countries, and by current gifts and return on endowments for those institutions fortunate enough or old enough to have such philanthropic support.
For the purpose of explicating the policy and practice of tuition fees, universities such as those in Belgium and the Netherlands that are privately owned and controlled, but that receive the preponderance of their operating support from the state (i.e., the taxpayer) and that consequently exhibit typical public sector tuition behavior, will not be considered in this section. Private sector tuition policy is, logically, significant in countries where a true private sector educates a substantial portion of higher education students: United States, Japan, Brazil, Colombia, the Philippines, India, South Korea, Indonesia, Argentina, Mexico, Turkey, and elsewhere. In a few countries -- e.g., France, Spain, Italy -- the private sector is very small but occupies a special, often elite, niche, and its tuition policies are significant in their effect on access to that niche (Geiger 1988).
In the U. S. private sector, where tuition fees in 1989-90 averaged $8,737 and ranged from lows of $4,000-$5,000 in the very small, local, often religiously-affiliated colleges, to highs of $14,000 and up in the elite, selective institutions (The College Board 1989), the principal determinant of tuition is not the presence or absence of alternative revenue, but rather the demand for -- or the number of students applying for admittance to -- a particular institution. Thus, it is the wealthier U. S. institutions such as Harvard, Yale, Princeton, and Stanford that also charge the highest tuitions. Poorly endowed regional private colleges, with little source of revenue other than tuition, are often forced to charge the least. Some observers have even charged some American private colleges with a deliberate marketing strategy of raising prices more than warranted by costs in order to acquire the patina of high status and great demand. But the principal consequence of enjoying a high endowment, high reputation, and high tuition is to be able to provide a much more enriched quality of academic life (e.g., lower student/faculty ratios, better paid and hence presumably more prestigious faculty, and more luxurious physical plant) and a much more academically-talented and socio-economically diverse student body through abundant scholarship assistance.
Levy (1986) describes a similar phenomena in Latin America, where the burgeoning private sector provides both a small, relatively well-financed, elite subsector that is able to charge high tuitions and to attract private donations, as well as a much larger, low-cost, "demand-absorbing" sector that depends almost entirely on tuitions, but is unable to charge much in competition with the zero-tuition, but limited-capacity, public sector.
2.1 Increasing Private Sector Tuition Fees
As in the public sector, the principal issue regarding tuition fees in the private sector is less their absolute level(s) than it is the necessary or appropriate rate of increase, whatever the level at a given time happens to be. Without the highly variable infusions of public funds that can, at least over a short run, insulate public tuition increases from underlying instructional cost increases, a private university must usually increase its tuitions at least as fast as its unit costs. And if an institution is expanding its offerings, or is more aggressively recruiting students through scholarships or price discounts, or is losing enrollments, it may have to increase tuitions at a rate even in excess of its general cost increases -- which, in turn, is almost inevitably in excess of the prevailing rate of inflation.
Tuition increases in the private sector may be politically unpopular, provoking public officials to attempt governmental controls or at least influence. The government of the Philippines, for example, sets ceilings for all but the most expensive private universities. The political dilemma of such a policy, however, is that the annual setting of the ceiling -- ostensibly to dampen the rate of increase that might otherwise prevail in the interests of students and their families -- becomes indistinguishable from the setting of the tuitions themselves and places the government in the role of perpetrator rather than protector. The United States Government excludes tuition from the costs of education used to calculate the Federal means-tested grants (Pell Grants), thus removing any possible incentive from the student aid system to raising tuitions. In the middle 1980s, the United States Secretary of Education William Bennett attempted to moderate private university tuition increases by public criticism, seemingly to no avail. In 1989, the United States Government began gathering information for possible price (tuition and means-tested grants) fixing among the high-tuition private institutions that regularly share information about proposed tuition increases and individual student awards prior to formal action. In the end, however, the rate of increase of tuitions in virtually all private sectors will reflect cost -- primarily wage and salary -- increases, with additional support from government, business, or philanthropic sources most often being used either for specified improvements or for privately-funded means-tested student scholarships to preserve access and selectivity in the face of the high and rising tuitions and other charges.
United States colleges and universities whose tuition fees were highest (upwards of $14,000 a year in 1989-90) and generally, also, increasing at the fast rate defended themselves with some or all of the following points:
Students and families were still paying considerably below the full average per-student cost, with the gap being made up by philanthropy, such that all students, even those paying full tuition, could be said to be receiving an implicit subsidy.
3. PAYING FOR TUITION FEES
Tuition fees, if levied, are added to the costs of student living to constitute those costs that must be met through some combination of:
3.1 Parental Contributions Toward Tuition Fees
Parental contributions toward the costs of their children's higher education, including tuition fees if any, are expected in most countries outside of Scandinavia, at least for a first tertiary-level degree. The expected parental contribution is generally "means tested," or calculated to conform to a presumed ability-to-pay, as measured by current income, usually adjusted for assets, number of dependent children, and other circumstances. Because the costs of student living have to be met anyway, tuition fees generally have no significance to a particular student and family unless they are sufficiently well-off first to be able to meet perhaps $4,000-$6,000 of necessary room, board, books, travel, and the like, and then to make a contribution toward any required tuition fees. For the United States in 1989-90, the before-tax income of a family with two dependent children and $60,000 of assets would have to be about $35,000 before they were expected to begin contributing enough (i.e., more than $4,000) to make any tuition significant, and approximately $50,000 to make significant an increase in tuition at an averaged-priced private American college (Johnstone 1986, The College Board 1989).
Ways of helping U. S. parents meet their expected contributions include:
3.2 Student Contributions Toward Tuition Fees
As in the case of the expected parental contribution, it is difficult, except in the case of a "graduate tax," to separate what the student contributes to living expenses from what he or she contributes, via tuition fees, to the costs of instruction. Expected student contributions beyond the amounts that can be earned and saved from vacation or term-time work, and beyond amounts that can come from parents, spouses, or other relatives, must be borne by some kind of loan. Student loans currently meet a large portion of student maintenance expenses both in Scandinavia, where there is no officially expected parental contribution and where student loans thus pick up at least part of what in other countries would come from parents, and in Germany, where heavily subsidized loans constitute the only means-tested student assistance and thus are taken in amounts sufficient to make up for the living costs that the parents are financially unable to contribute (Johnstone 1986, Stager 1989). Britain plans to phase in a loan plan beginning in 1990, eventually to cover one-half of living costs, with the other one-half to be met through a combination of expected parental contributions and the means-tested mandatory grants (Johnstone 1989, Stager 1989).
Student loans are an important vehicle for meeting a student share of tuition fees, in addition to living expenses, in the United States, Canada, Japan, Colombia, Hong Kong, and elsewhere in Latin American and Asia (Johnstone 1986, Woodhall 1987). Australia began in 1989 to obligate students to repayment of 20 percent of instructional costs, not as a conventional loan, but as a "tax debit," similar to the "graduate tax" concept.
All student loans to be generally available -- i.e., without imposing a creditworthiness test on the student borrower -- need to be either directly capitalized, or else guaranteed, by the government. Most student loans are also subsidized beyond the implicit subsidy of the guarantee. The principal forms of student loans, as defined by the terms to the borrower, are the following:
D. Bruce Johnstone
Chancellor, State University of New York
Albany, New York
* Written for an entry inBurton R. Clark and Guy Neave, Eds., The Encyclopedia of hHigher Education, Vol. 2. London: Pergamon Press, 1992.