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Past Program

Feb 10 - Feb 14, 2007

Public-Private Innovations in Higher Education: Student Loans, Economic Growth, and International Student Exchange in Russia and CIS Countries

SLS 01

Abstract

Issues emerging from conference "Public-Private Innovations in Higher Education: Student Loans, Economic Growth and International Student Exchange in Russia and CIS Countries" (February 10-14, 2007)

Many countries around the world in seeking to expand access to their higher education systems or in order better to finance existing systems are turning to 'cost sharing' (participation by students and parents in paying education costs) . The most prevalent form of cost sharing is student loans. Often these loans are guaranteed against default by central governments, but increasingly privately insured loan programs or programs insured jointly by private entities and governments are emerging.

At the joint conference of the Salzburg Seminar, the New Eurasia Foundation (Moscow), The Institute for Higher Education Policy (Washington D.C.) and The First Marblehead Corporation (Boston), a series of presentations highlighted continuing need for better funding of higher education in Russia and the regions and the possibilities of student loans as a means of achieving this. Prominent education leaders were eloquent in making the case for the need for better funding, and the difficulty of maintaining high quality without sufficient support.

Highlights of the conference included practical and concrete presentations of student loan models which can work.

The private student loan program of the Crane Company is already in place in Russia and may expand in the very near future to the regions. It provides Russia and the CIS with an important prototype to address the various issues which arise when student loans are introduced including cultural resistance to borrowing, the need to build necessary servicing and collection infrastructure, and the issue of how best to deal with risk. As the Crane model develops, it will also be able to deal with the issue of capital liquidity perhaps through securitization.

The US based First Marblehead Corporation presented a model whereby an initial infusion of capital by either a government or philanthropy could establish a student loan program which could be perpetually self funding. Proceeds from the loans could be reused to originate new loans so that the original benefactor could recover its original investment and the loan program could continue without additional funding.

The assembled experts agreed that higher education continues to be the key to economic success in every nation of the world and that mechanisms which will support higher education are crucial. They called for additional exploration of ways to expand support beyond student loans including state and privately supported bond issues, innovative collaboration between business and higher education within the Salzburg Seminar Collaborative Innovation Initiative (CII), philanthropy and creative use higher education real estate and facilities in providing service.