Singapore's GFE Scheme Tests Private Finance for Regional Student Loan Gaps
Global Financing for Education's Pay It Forward scheme, launched in September, links tuition to graduate income in Singapore to see if private finance can address gaps in regional student loans, though economists note potential exclusion risks for lower earners.
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According to the South China Morning Post, a scheme in Singapore that ties tuition costs to the income of graduates is being tested to determine if private financing can address the 'missing middle' within regional student loan frameworks.
Global Financing for Education's (GFE) Pay It Forward scheme was made public in September and offers students educational funding in exchange for 3 to 10 per cent of their future earnings over a period of one to 10 years.
Graduates repay GFE through income-linked payments, which are generally limited to twice the initial funding amount. This structure transfers the risk associated with low earnings or weak employment from the students to the financing pool.
However, economists have expressed concerns that the private-sector nature of the arrangement raises questions regarding the selection criteria and whether individuals pursuing careers with lower earnings might ultimately be excluded from the program.
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