Individual Presentation or Panel Title

Higher Education, Higher Cost: An Income-Contingent Approach

Abstract

Tuition continues to climb at a rate exceeding inflation while real wages remain stagnant, resulting in declining affordability and availability of higher education in the United States. In considering the international income-contingent repayment programs (ICRS) of Australia and the U.K. as well as recent proposals made for the states of Washington and Oregon, I apply an income-contingent model to a small state-funded university in Virginia. Using a case study and net present value approach with data published by Radford University, I analyze my proposed ICRS program to determine its efficacy and sustainability as an alternative payment method.

My findings suggest that my proposed ICRS program is both feasible and sustainable for the class of 2014. I also find that the program is advantageous for the participating students, promoting equity across genders and mitigating the burden they assume immediately following graduation when their disposable income typically is at its lowest levels. The proposed program addresses the affordability of higher education crisis in that it makes higher education more accessible to students who would otherwise be deterred from pursuing it. Furthermore, the model’s simplicity lends itself to being a more transparent payment option in a sea of increasingly byzantine financing options.

Presenter Information

Catherine Hensly, Hollins University

Location

Glass Dining Room

Start Date

3-5-2014 1:30 PM

End Date

3-5-2014 2:20 PM

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May 3rd, 1:30 PM May 3rd, 2:20 PM

Higher Education, Higher Cost: An Income-Contingent Approach

Glass Dining Room

Tuition continues to climb at a rate exceeding inflation while real wages remain stagnant, resulting in declining affordability and availability of higher education in the United States. In considering the international income-contingent repayment programs (ICRS) of Australia and the U.K. as well as recent proposals made for the states of Washington and Oregon, I apply an income-contingent model to a small state-funded university in Virginia. Using a case study and net present value approach with data published by Radford University, I analyze my proposed ICRS program to determine its efficacy and sustainability as an alternative payment method.

My findings suggest that my proposed ICRS program is both feasible and sustainable for the class of 2014. I also find that the program is advantageous for the participating students, promoting equity across genders and mitigating the burden they assume immediately following graduation when their disposable income typically is at its lowest levels. The proposed program addresses the affordability of higher education crisis in that it makes higher education more accessible to students who would otherwise be deterred from pursuing it. Furthermore, the model’s simplicity lends itself to being a more transparent payment option in a sea of increasingly byzantine financing options.