A solution to the student loan crisis: human capital contracts

This Note proposes a novel financing scheme, characterised by private equity investments in higher education, as a solution to the student loan crisis. As first proposed by economist Milton Friedman, human capital contracts are financial instruments with which students can receive private capital to fund their educational pursuits in exchange for a certain percentage of their future earnings. Income-contingent human capital contracts provide for an economically preferable higher education financing scheme because they allow for price determination, flexibility, and greater access to the higher education sector.