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ERIC Number: ED530142
Record Type: Non-Journal
Publication Date: 2008-Jan
Pages: 44
Abstractor: As Provided
Reference Count: 34
ISSN: ISSN-2045-6557
The Effects of Higher Education Funding Reforms on the Lifetime Incomes of Graduates. CEE DP 78
Dearden, Lorraine; Fitzsimons, Emla; Goodman, Alissa; Kaplan, Greg
Centre for the Economics of Education (NJ1)
This paper undertakes a quantitative analysis of substantial reforms to the system of higher education (HE) finance first announced in 2004 and then revised again in July 2007. The reforms introduced deferred fees for HE, payable by graduates through the tax system in the form of income-contingent repayments on loans subsidised by the government. Lifetime earnings that have been simulated by the authors using innovative methods, are used to analyse the likely distributional consequences of the reforms for graduates. It is shown that graduates with low lifetime earnings will pay less for their HE than graduates higher up the lifetime earnings distribution compared to the system operating before the reforms. Taxpayers will bear substantial costs due to the interest rate and debt write-off subsidies. The extent to which the reforms are likely to shift the balance of funding for HE between the public and private sector is also analysed, as well as the likely distributional consequences of a number of variations to the system such as removing the interest subsidy from the loans. Copula Model for Earnings Dynamics is appended. (Contains 6 tables, 12 figures and 32 footnotes.)
Centre for the Economics of Education. London School of Economics and Political Science, Houghton Street, London, WC2A 2AE, UK. Tel: +44-20-7955-7673; Fax: +44-20-7955-7595; e-mail:; Web site:
Publication Type: Reports - Evaluative
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: Nuffield Foundation (England); Department for Education and Skills
Authoring Institution: London School of Economics & Political Science, Centre for the Economics of Education
Identifiers - Location: United Kingdom