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The Japanese government is considering major reform to the higher education tuition system by moving to an income-contingent loan scheme similar to systems in Australia, England, Hungary, the Netherlands and some other countries.

The system is based on a simple but powerful concept: with an income-contingent loan scheme, students enter university at little-to-no immediate cost and pay off their tuition later when they are earning incomes that are above a prescribed minimum. If over their lifetimes graduates don’t earn above these amounts then they are not required to repay any of the debt.

Most countries have student loans that are not income-contingent. This means that — like housing mortgages — these loans need to be repaid at regular intervals after leaving university no matter the income or circumstances of the graduate. This can lead to repayment hardships and significant defaulting on student debts, and this ruins personal credit ratings and requires the taxpayer to cover the difference. Read more

The Japanese government is considering major reform to the higher education tuition system by moving to an income-contingent loan scheme similar to systems in Australia, England, Hungary, the Netherlands and some other countries.

The system is based on a simple but powerful concept: with an income-contingent loan scheme, students enter university at little-to-no immediate cost and pay off their tuition later when they are earning incomes that are above a prescribed minimum. If over their lifetimes graduates don’t earn above these amounts then they are not required to repay any of the debt.

Most countries have student loans that are not income-contingent. This means that — like housing mortgages — these loans need to be repaid at regular intervals after leaving university no matter the income or circumstances of the graduate. This can lead to repayment hardships and significant defaulting on student debts, and this ruins personal credit ratings and requires the taxpayer to cover the difference.

The Japanese government is considering major reform to the higher education tuition system by moving to an income-contingent loan scheme similar to systems in Australia, England, Hungary, the Netherlands and some other countries.

The system is based on a simple but powerful concept: with an income-contingent loan scheme, students enter university at little-to-no immediate cost and pay off their tuition later when they are earning incomes that are above a prescribed minimum. If over their lifetimes graduates don’t earn above these amounts then they are not required to repay any of the debt.

Most countries have student loans that are not income-contingent. This means that — like housing mortgages — these loans need to be repaid at regular intervals after leaving university no matter the income or circumstances of the graduate. This can lead to repayment hardships and significant defaulting on student debts, and this ruins personal credit ratings and requires the taxpayer to cover the difference.