July 20, 2004

Private contributions for higher education: Benefiting from the direct benefit principle

In the Dutch policy debate there is a lot of attention for an increase of the private contribution for higher education in combination with reform of the student support system. These drastic changes call for insight into the private returns to higher education, and the effects of loans on the behaviour of students.

Recent research carried out at CPB uses natural experiments to study these issues.

The research indicates a private return to higher education of approximately 7 to 9%. With regard to student choice, introduction of performance-contingent student support seems to have led to a small relocation from university programs to upper vocational education programs, in the order of 2%. Students with a performance-contingent grant drop out less frequently, and pass 5% more courses than students in the old regime. This document reports on the main findings relevant for policymakers.

This publication is in Dutch.


Erik Canton
Dinand Webbink
Michèle Belot

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