The impact of income‐contingent provisions on students' loan‐taking behaviour

Abstract

This paper investigates the determinants of taking out government-funded student loans for university study in Australia. Using an ordered probit model, the analysis considers the factors which affect students' decisions on funding their entire tertiary study using student loans, funding some of their university study using student loans, and funding their university study entirely through other means. It finds that the probability of taking out students loans for the full cost of university is largely influenced by students' socioeconomic status. Other major influences on this decision include students' demographic and university enrolment characteristics.