In principle, income contingent loans for individual financing of higher education, repaid though the tax system when an appropriate income threshold is reached, are the preferred scheme for financing higher education. But in some countries the institutional framework might not be sufficiently robust to allow efficient, workable, collection of income contingent loans. If this is the case, a productive policy strategy might involve improvements in public sector management.
The Australian case offers some useful insights into the application of higher education financing in East Asia, although it would be wrong to suggest that income contingent loans schemes are a panacea for all the challenges to financing higher education funding. There are many difficulties in design as well as other problems beyond the design of income contingent loans schemes that need to be part of effective strategies for funding higher education in East Asia and elsewhere.