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Estimating taxpayer subsidies and individual repayment burdens of a student loan program in Spain

We study the program Préstamos Renta Universidad that provided loans to Master’s students in Spain between 2007 and 2010. We estimate predicted income functions and calculate individual repayment burdens and government cost using unconditional quantile regression analysis. We exploit the changing conditions of the successive calls to illustrate three important lessons for the design of student loan schemes: fixed monthly repayments exert an excessive burden to graduates at the lower end of the income distribution; general interest rate subsidies are costly to the taxpayer and unfairly distributed; while the deferment of payments due in case of hardship protects low earners, general grace periods are costly and inequitable

Financial support from the Spanish Ministry of Science (projects ECO2013-45395-R and ECO2013-48496-C4-4-R), the Regional Government of Aragón and FSE (project S125: Compete Research Group) and the Generalitat de Catalunya (contract 2014 SGR 1360, and the XREPP) is gratefully acknowledged

info:eu-repo/grantAgreement/MINECO//ECO2013-45395-R/ES/BIENESTAR, MECANISMOS DE ASIGNACION Y POLITICAS PUBLICAS/

Instituto de Estudios Fiscales

Manager: Ministerio de Economía y Competitividad (Espanya)
Author: Callado Muñoz, Francisco J.
Rey Canteli, Elena del
Utrero González, Natalia
Date: 2017
Abstract: We study the program Préstamos Renta Universidad that provided loans to Master’s students in Spain between 2007 and 2010. We estimate predicted income functions and calculate individual repayment burdens and government cost using unconditional quantile regression analysis. We exploit the changing conditions of the successive calls to illustrate three important lessons for the design of student loan schemes: fixed monthly repayments exert an excessive burden to graduates at the lower end of the income distribution; general interest rate subsidies are costly to the taxpayer and unfairly distributed; while the deferment of payments due in case of hardship protects low earners, general grace periods are costly and inequitable
Financial support from the Spanish Ministry of Science (projects ECO2013-45395-R and ECO2013-48496-C4-4-R), the Regional Government of Aragón and FSE (project S125: Compete Research Group) and the Generalitat de Catalunya (contract 2014 SGR 1360, and the XREPP) is gratefully acknowledged
Format: application/pdf
Document access: http://hdl.handle.net/10256/15501
Language: eng
Publisher: Instituto de Estudios Fiscales
Collection: info:eu-repo/semantics/altIdentifier/doi/10.7866/HPE-RPE.17.1.3
info:eu-repo/semantics/altIdentifier/issn/0210-1173
Is part of: info:eu-repo/grantAgreement/MINECO//ECO2013-45395-R/ES/BIENESTAR, MECANISMOS DE ASIGNACION Y POLITICAS PUBLICAS/
Rights: Tots els drets reservats
Subject: Préstecs d’estudis
Student loans
Title: Estimating taxpayer subsidies and individual repayment burdens of a student loan program in Spain
Type: info:eu-repo/semantics/article
Repository: DUGiDocs

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