| Резюме: | This paper analyses theoretically and quantitatively the effect that different higher education funding policies have on welfare (on aggregate and at the individual level) and wealth
inequality. A heterogeneous agent model in continuous time, which has uninsurable income
risk and endogenous educational choice is used to evaluate five different higher education
financing schemes. Educational investments can be self financed, supported by government
guaranteed student loans - that may come with or without income contingent support - or
be covered by the public sector. When educational costs are small, differences in outcomes
amongst systems are negligible. On the other hand, when these costs rise to realistic levels
we see that there can be large gains in welfare and significant drops in inequality by moving
to a system with more public sector support. This support can come in the form of tuition
subsidies and/or income contingent student loans. However, as the cost of education and
the share of debtors in society gets larger, it is preferable to increase public support in the
form of tuition subsidies. The reason is that there is a pecuniary externality of debt that
gets magnified when student loans become excessive. While I identify large steady state
welfare gains from more public sector financing, I show that transition costs can be large
enough to justify the status quo.
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