DEFERRED TUITION FEE IN

THE CR Petr Wawrosz

Herbert Heissler

University of Finance and Administration

Prague, Czech Republic

NUMBER OF CZECH CITIZENS STUDING AT CZECH UNIVERSITIES 1993: 123 thousands 2011: 357 thousands

Impossible trinity:larger quantity, higher quality and moderate public spending

IMPORTANCE OF HUMAN CAPITAL Decline importance of other factors:

- raw materials- capitals tocks- technology

Human capital- private and public returns

Education for citisenships versus vocational training

PROBLEMS CONNECTED WITH INVESTMENST IN HC Private benefits are realized ex post Owner of HC cannot give satisfied

guarantee

How to overcome liquidity constraint : postpone payment to the period when borrower earn enough money

Possible ways:- Human Capital Contract- Graduate tax- Income Contingent Loan

HUMAN CAPITAL CONTRACTS = a voluntary private contract between a

student and an investor in which a student commits part of his future earnings to an investor for a fixed period of time in exchange for capital for financing education

Main parameters:- percentage of income and the repayment period

Disadvantages:- hidden income- adverse selection- willingness investors to invest money for lung run (bad example: MRU)

GRADUATE TAX State lend money to student (can give

directly money to university) Student return money in form of

graduate tax

INCOME CONTINGENT LOAN Australia (HECS, HELP) Great Britain Government Participation

CZECH REPUBLIC What is necessary to explain (clearly

stipulate):- The place of the student loan scheme or schemes in the total array of policy elements making up the complex sharing of higher educational cost. - The aim of the loan scheme. - The degree of subsidization (how much government subsidizes the loan). - The method of rationing or targeting (who recieves loans). - Default risk. - The manageability of repayments. - Method of disbursement.