Financing higher education in Vietnam: Student loan reform

Working paper

Working Paper 51 by Dung Doan, Jiacheng Kang and Yanran Zhu examines the potential of reforming the higher education student loan system in Vietnam – a rapidly aging middle-income country – as a solution to further invest in human capital and meet the country’s evolving demand for skilled labour. The paper finds that Vietnam’s current loan scheme not only supports a negligible number of credit-constrained students amidst rising tuition fees but can also create excessive repayment burden to debtors. The paper then explores three potential income-contingent loan schemes and analyses how they might perform in Vietnam with respect to government subsidies and debtor’s repayment experience. Using data from the Vietnam Household Living Standard Survey 2012-2016 and the Labor Force Survey 2016 and a recent econometric innovation that involves Copula functions to project graduate lifetime earnings, the paper concludes that it is feasible to design an income-contingent loan scheme that is both gentle on the fiscal

Authors: Doan, D; Kang, J; Zhu, Y

• Publication status: Published
• Publisher: Centre for Global Higher Education, University of Oxford
• Series: Centre for Global Higher Education working paper series
• Publication date: 2020-01-01
• DOI: 10.5287/ora-kkzagkj18
• EISSN: 2398-564X
• Paper number: 51
• Language: English