Why Don't We Just Give Them the Money? Financing Living Expenses of Students in Germany

Barbara Grave, Mathias Sinning

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    This chapter assesses the subsidies of the German student loan scheme for financing living expenses, establishes hypothetical repayment burdens in the absence of subsidies, and discusses the costs and benefits of conventional and alternative income contingent loans (ICLs). We find that the underlying subsidies of the German student loan scheme range from 57 to 80 per cent, indicating that the current scheme could be replaced by student grants if the administrative costs of collecting the debt are sufficiently high. We further demonstrate that the current scheme would either entail very high repayment burdens or very long repayment durations in the absence of loan subsidies and explain why an ICL may be viewed as a reasonable alternative to the current student loan scheme.
    Original languageEnglish
    Title of host publicationINCOME CONTINGENT LOANS: Theory, Practice and Prospects
    Editors Bruce Chapman, Timothy Higgins & Joseph E Stiglitz
    Place of PublicationBasingstoke and New York
    PublisherPalgrave Macmillan Ltd
    Pages109-124
    Edition1st
    ISBN (Print)9781137413185
    DOIs
    Publication statusPublished - 2014

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