Learning from Global Best Practice and Innovations in Student Finance


Higher education gives people the skills they need to find employment and increase their incomes. Advances in basic health and education have created a “demographic dividend” of young people eager to improve their lives and contribute to increasingly knowledge-based economies in developing countries. 

Demand for university and vocational training has increased sharply across the globe over the last decade but too few students have access to the education they need to improve their lives. 


As public educational institutions struggle to increase capacity to meet this demand, many families are relying on private education. Unfortunately, private higher education can be unaffordable for low-income students. IFC and Parthenon-EY have published a report based on a recent study exploring innovative models for student finance in developing countries that are expanding access to private education, and that may even offer clues for resolving a crisis in student finance in the developed world.

The report highlights student financing models currently operating at scale in emerging markets and provides recommendations for donors, lenders, and education institutions interested in building a strong student finance program. The report provides detailed case studies of three companies: Eduloan in South Africa; Ideal Invest, an IFC client in Brazil; and Duoc UC, an IFC client and vocational institution in Chile. The report also highlights innovations in finance globally, including crowdfunding, social impact bonds, and income-based repayment loan schemes

Findings suggest that the most successful models for student finance are those which include higher education institutions as key partners in providing risk sharing, tuition discounts, and loan counseling. Loan program sustainability is driven by the ability of graduates to find employment. Meanwhile, donors can play an important role in enhancing the development impact of student finance investments by developing methods for tracking data related to graduate employment and income gains, trends in the labor market, and demand for particular courses among employers.

Click on the photos on the right to see how innovators are expanding access to financing for education.








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