Risk factors identifying why students drop out have been well documented, making it possible to identify students at risk of dropping out. The literature reviewed also identifies loan administration fees and exemptions as factors influencing financial viability on loan programs. There is consensus in the literature reviewed that students who drop out are more likely to default on student loans and therefore are a risk to the financial viability of student loan programs. Unemployment and poor management of loan recovery are contributing factors to student loan default levels. Loan default is one of the major risks identified. However, significant variation was identified in the eligibility, re-payment, exemptions and dischargeability criteria. Most student loans are interest-free during the study period with payments commencing 6-12 months after program completion. While there are variances across student loan programs around the world, the structure is somewhat similar. In many cases, the shift is from reliance on government funding to an increasing reliance on students, which increases the demand for student loans. This has forced higher education institutions to make up the difference from other sources of funding this is referred to as zero-sum cost sharing. Public sources of funding are becoming increasingly insufficient to fund higher education. In many countries, tuition is financed using student loans, creating a risk of loan defaults that can have serious implications for financing bodies, government, educational institutions and of course borrowers. Tuition fees contribute significantly to the overall operating budget of higher education institutions.
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