Abstract:
The income contingent loan is a kind of student loans that students repay the loans with a certain percentage of the salaries. The special cash flows of the income contingent loan result in higher repayment rate of the loans, and require the suitable financing models in order to ensure the sustainable operation of the loans. As a flexible, low-cost financing model, asset securitization is applicable. This paper attempts to design the asset securitization of the income contingent loan. On the one hand, it is conducive for the lending institutions to obtain liquidity. On the other hand, it can re-energize the asset securitization market.