Student debt among University of Latvia graduates: Repayment prospects under income-contingent student loan scheme

Abstract

This study examines the relationship between student debt and income by gender and field of study among University of Latvia graduates of 2009. Data analysis in the paper is also framed by suggestions for an income-contingent student loan scheme in Latvia, modeled after the Australian example of the Higher Education Contribution Scheme. This research models a possible student loan payment pattern in Latvia under an income-contingent student loan plan. Data analysis shows that in the current mortgage-type student loan system, graduates of both genders in all fields of study and income groups have similar student debt levels, on average. At the same time, the largest portion of student debt is held by graduates in lower income groups. In the context of an income-contingent student loan payment scheme, analysis reveals that women and graduates in the field of humanities, pedagogy and psychology would be likely to belong to the low payment group. Consistent with findings in other studies, this research finds that female higher education graduates have lower income than men, on average, while graduates in the field of economics and business management tend to have higher income than graduates in other fields of study.