TITLE: Cost Sharing in Higher Education Financing: A Model for the Caribbean
AUTHORS: Roger Hosein, Bhoendradatt Tewarie, and Daren Conrad
JOURNAL: CJE Vol. 39 Nos. 1&2, pp. 66-94
PUBLICATION DATE: November 2017
As noted by the corresponding author, Daren Conrad, the section “Implications for the OECS” beginning on page 86 appears incorrectly:
"The critical and deﬁning attribute of an ICL is that the collection of the debt by the state depends on the income of the borrower in the future. The ability of the graduate to repay, not a deﬁned time period, determines the repayment obligations of the borrower. ICLs are used in several economies including South Africa, Chile and Australia.
The rest of this section outlines some aspects of the ICL funding strategy as used in Australia where it was ﬁrst introduced and has since been adopted by a number of other countries21. The ICL arrangement proposed here is meant to shift the burden of payment to that point after graduation when the student can in fact, pay. By shifting the payment from the point of consumption to the securing of a “good job” after graduation, the proposal addresses the issue of equity by making education free at point of consumption with payment due when the graduate can aﬀord. The minimum threshold for salaries does not impose a debt burden that denies the graduate a good quality of life. Essentially, the graduate does not begin to repay until they receive value for money of a well-paying job. Financially, no one who can aﬀord an education need take a loan to create debt. No one needs to incur a debt larger than they actually need. Repayment does not start until the graduate receives ample reward in the marketplace."
It should be replaced by the following:
Implications for the OECS
The OECS countries have continuously benefitted from investments and grants into their education system from a number of sources including the Global Partnership for Education and the World Bank. Implementing an Income Contingent Loan strategy in the OECS countries may be beneficial as it would allow for and encourage sustainable human capital development. The provision of loans to students to acquire tertiary level education which they can then repay on securing a job would allow for an increased amount of students to pursue tertiary level education. According to a press release by the Global Partnership for Education in 2016, there has been a declining participation rate in boys from lower economic backgrounds for secondary and tertiary level education which can lead to higher chances of unemployment and a continued cycle of poverty. Hence the introduction of an ICL strategy would prove beneficial as this would potentially decrease poverty and unemployment levels as well as increase the level of human capital. Not only would individuals benefit but also the governments as the burden to financially provide for students would no longer solely fall on them in the long run; thus proving that the ICL strategy would be sustainable and beneficial to both students and the governments of the OECS.