Current higher education policy debates in Europe are increasingly focusing on raising the share of private funding. To date, policy proposals have centred on a relatively small number of alternatives, namely full public funding, tuition fees, either up-front or delayed and income-contingent, or a surtax on graduate incomes. Here, I present an alternative that, to my knowledge, has not been suggested previously, but sidesteps some important objections against other forms of private contributions. The basic idea explored here is to increase the statutory retirement age for higher education graduates relative to nongraduates. In principle, the resulting decrease in future public pension liabilities can be converted into increased funds for present spending on higher education. In this first discussion of the above proposal I consider important caveats, perform an order-ofmagnitude estimate of whether the financial implications of Deferred Graduate Retirement (DGR) are comparable to those of tuition fees, and discuss advantages and disadvantages compared to more established policy options. I conclude that, at least in the continental European context, DGR promises a number of economically and politically desirable properties compared to established alternatives, and deserves more serious investigation.
Keywordshigher education, fees, funding, access, retirement within a framework of endogeneous decisions regarding labour supply, for example. But also in that such a limited view ignores real-life cognitive and behavioural effects. In relation to HE participation, manifest behaviour is well-documented to deviate from strictly economic rationality. This has been noted with respect to mobility (Wakeling and Jefferies, 2013), take-up of financial aid or the repayment schedule of student debt (Chowdry et al., 2012), and the 'haphazard post-secondary choice process' in general (Scott-Clayton, 2013, 75). In his study of decision-making among HE applicants, Usher (2010) found 'there was not a single case of a student being able to show in concrete terms that they had appraised their chosen HE options in terms of both costs and benefits' (p 69). Policy-making with respect to HE funding is likewise 'less the result of rational analyses and more the outcome of negotiation among stakeholders with competing interests' (Marcucci, 2013, 9). It matters how issues are framed, communicated, and justified (Usher, 2010). Accordingly, policies that are equivalent in accounting terms can interact quite differently with perceptions, attitudes, and actual participation decisions.Naturally, there is no empirical evidence yet on how prospective HE entrants perceive and respond to the idea of DGR. However, given well-known general cognitive biases (e.g.'sticker price shock', or 'hyperbolic discounting') it seems highly likely that DGR will have a different effect on HE participation behaviour than fees or a graduate tax. To make the case why DGR might actually be preferable, it is therefore necessary to discuss the issue in terms of HE polic...