COST-SHARING VERSUS EQUITY CONCERNS: ARE STUDENTLOANS ALWAYS THE BEST OPTION?

All over the world, governments are finding it difficult to fund higher education and are looking for ways of cost-sharing. On the other hand, increasing equitable access to higher education is another challenge. Student loans tend to offer a solution for both these mutually incompatible goals. The pervasiveness of student loan schemes across the globe can be seen as evidence that student loan has become the instrument of choice for this cost sharing and equitable access. However, data from several countries reveal that most of these schemes are far from successful and desired goals have not been fully achieved through them. I have divided this paper into two parts. In the first part, it is argued that student loans, if properly planned and administered, are quite good for cost sharing purposes but provide only low to moderate equitable access to higher education. So student loans must be run with the aim of viability. Then I shall recommend the arrangements and conditions necessary for student loans to be viable and socially beneficial (as much as possible). In the second part, the study will raise the point that some more initiatives, other than student loans, are needed for achieving the goal of real equitable access to higher education and upward social mobility of the disenfranchised. Then I shall point out and discuss these options which may prove helpful in situations where student loans cannot or should not be offered.