Student Loans: A Hungarian Proposal - Part 1: Design

May 2000

Student Loans - A Hungarian Proposal Part 1

The Hungarian government intends to introduce a system of student loans as part of a wider reform of higher education. This paper analyses the Government’s strategy for the design and operation of student loans. A companion paper discusses key issues of implementation.

The objective is to provide an opportunity for every talented young Hungarian – whatever his or her family’s financial background – to participate in higher education by introducing a student loan system which is universal, protects the individual from undue risk and minimises the burden on the state budget. The existing system provides grants only for state-financed students who are already in higher education. The introduction of student loans will improve access: the proposed arrangements decrease the financial burden on students and their families of participating in higher education; they also allow opportunities to thosewho would otherwise not even apply.

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Client: Republic of Hungary

Authors: Nicholas Barr & Iain Crawford

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