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Deferred tuition fee in THE CR

This article explores the concept of deferred tuition fees and various financing options available for students at Czech universities, specifically the University of Finance and Administration in Prague. It highlights the increasing number of Czech citizens enrolled in higher education and discusses the significance of human capital in education. Key alternatives such as Human Capital Contracts, Graduate Taxes, and Income Contingent Loans are examined. The discussion includes challenges, including liquidity constraints and the necessity of clear government policies to support these financing schemes.

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Deferred tuition fee in THE CR

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  1. Deferred tuition fee in THE CR Petr Wawrosz Herbert Heissler University of Finance and Administration Prague, Czech Republic

  2. Number of Czech Citizens Studing at Czech Universities • 1993: 123 thousands • 2011: 357 thousands • Impossibletrinity:larger quantity, higher quality and moderate public spending

  3. 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

  4. 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

  5. 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)

  6. Graduate Tax • State lend money to student (can give directly money to university) • Student return money in form of graduate tax

  7. INCOME Contingent LOAN • Australia (HECS, HELP) • Great Britain • Government Participation

  8. 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.

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