savings. However, subsidies also encourage more poorly prepared students to attend and are usually financed via distortionary … decentralized (zero subsidy) outcome. We show that subsidies help smooth consumption, lower skill premia, increase interest rates as …

preferred. Risk-pooling schemes can however be prone to adverse selection problems, particularly if students are mobile. The … paper explores the implications of allowing students to opt out of the risk-pooling income-contingent loan for a pure loan …. It shows that risk-pooling income-contingent loans can be sustained even when some students opt out …