Individualized Student Loans Sponsored by Companies for Bridging the Gap between Education and Employment

Kirill Romanyuk

Abstract

Student loans represent a conventional form for increasing access to higher education. However, students usually take all risks from these loans, and companies obtain most of benefits. In this paper, a model for sponsoring student loans by companies is discussed. Basically, companies and governments provide financial assistance for students. However, companies can provide guarantees for students based on their academic results, i.e. the better academic results are, the more benefits a student obtains, including guaranteed employment after graduation in case of high academic performance. Application of such a model can motivate students to show better performance and bridge the gap between university education and further employment. Student loans are supposed to become less risky and more motivational that can result in greater competition among applicants in universities that leads to a greater talent level of admitted students. As a result, job positions can be filled with more talented people to produce greater outcomes and higher tax payments in the long run. Moreover, options for companies to save money on salaries and tax payments are discussed.

Keywords

Higher Education; Student Loans; Incentives; Information Asymmetry; Tax Optimization

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DOI: https://doi.org/10.26220/aca.3171

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