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Investing in Human Capital A Capital Markets Approach to Student Funding

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ISBN-10: 0521039525

ISBN-13: 9780521039529

Edition: N/A

Authors: Miguel Palacios Lleras, Nicholas Barr

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This study recommends employing "human capital contracts" wherein students agree to pay a percentage of their income over time in exchange for funds to finance their education. The main difference between "human capital contracts" and loans is the variable value of the payments students make during the repayment period. Their financial consequences, of risk transfer from students to investors and increased information regarding future graduates' earnings, make the contracts an attractive alternative in funding higher education.
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Book details

Publisher: Cambridge University Press
Publication date: 8/16/2007
Binding: Paperback
Pages: 252
Size: 5.98" wide x 9.02" long x 0.55" tall
Weight: 0.814
Language: English

Miguel Palacios Lleras is a Fellow at the Batten Institute, Darden School of Business Administration at the University of Virginia. He is the author of numerous papers on financing human capital and is co-founder of Lumni, a company that manages human capital funds.

List of figures
List of tables
The Problem of Financing Education
The value of education
Market failure in the financing of education
The need for alternatives to traditional funding
Equity-Like Investments to Finance Education
The evolution of human capital contracts
How human capital contracts work
The case for human capital contracts
Human capital options
Implementing Human Capital Contracts
Hurdles in the implementation of human capital contracts
Lessons from the implementation of income-contingent loans
Government-driven implementation of human capital contracts