Rethinking the Welfare State: The prospects for ... - e-Library

Post-secondary education 177
system.” 46 It is argued that an ICLP is the most efficient and equitable mechanism for
achieving this end, because it has the capacity to increase accessibility, despite the higher
student contributions required under our system. Since students will not have to repay the
loan until they are actually earning income, the low-income status of one’s family will
not affect one’s ability to pay. Calibrating financial obligation to ex post realized income
rather than ex ante financial means is a more effective and equitable mechanism for
addressing distributive justice concerns.
Vouchers based on ICLs render the costs of post-secondary education more
transparent to students, shift more of the costs of higher education to students, which is
appropriate (and more equitable) in light of the significant private benefits associated
with university education. 47 Confronting students with the actual costs of their education
may also reduce the levels of attrition at post-secondary institutions. Finally, reliance on
universal voucher-based ICLs will allow students to realize a higher degree of
independence than is possible through existing means-tested loan programs that target
financial assistance to those students coming from low-income backgrounds. ICLs mean
that “no student need rely on their parents to pay for the cost of their tuition.” 48 This can
further increase the salience of the value of a post-secondary education to students.
Moreover, there is some evidence that demand-side funding of university education
can produce positive results if properly implemented. In addition to the British and
Chilean design adjustments, consider the experience of the United States, Australia and
New Zealand. The US GI Bill of 1944 and its two descendents (instituted after the
Korean and Vietnam wars, respectively) made post-secondary educational vouchers
available to all servicemen and women returning from wartime conflict. These measures
are often regarded as the most successful implementation of post-secondary education
voucher programs and provide useful evidence demonstrating their feasibility. 49 The GI
bills made provision for universal vouchers that were awarded regardless of means—
every serviceman and woman was entitled to funding for higher education. At its peak in
1947 the GI bill program accounted for over half of all university enrollment with 1.1
million veterans receiving GI bill assistance for higher education. 50 The subsequent
incarnations of the program were somewhat less successful, perhaps because the
universities were less receptive and accommodating of the special needs of returning
veterans. 51 While not as extensive or as influential as the GI bill programs, Pell grants
have also been a successful instrument in improving access to post-secondary education
for indigent students in the US since their inception in 1972. 52 Subsequent to the passage
of the GI Bill in 1944, “one result was an upsurge in enrolments overall, and especially in
the Ivy League colleges. Private institutions, which made up most of the top echelon of
US colleges, had the largest increase in enrolments.” 53 Indeed, the Bill was viewed as
being successful both in preparing veterans for participation in the labour market, 54 and in
enabling increased numbers of individuals from minority or disadvantaged groups to
attend a post-secondary institution. 55
Australia was one of the first industrialized democracies to adopt a comprehensive
ICLP. Prior to the introduction of the program, Australia had experienced surging
demand for higher education but limited state capacity to fund required increases for its
public universities. 56 Further, higher education was completely free. 57 In 1989, the Higher
Education Contribution Scheme (HECS) was created. 58 Under this scheme, students
became responsible for a A$1,800 annual charge. This could either be paid up-front with