years and fee increases may be accompanied by other changes, particularly in economic
conditions, that are relevant. Primary school drop-out does not appear to have increased
in Malawi between 1981 and 1983 when fees were raised but this may partly reflect a
tendency to continue paying for those already enrolled. Secondary fees were increased
by 50% and boarding charges by 150% and about 8% of children from low asset
backgrounds and only 4% from high asset backgrounds appear to have dropped out as a
result. The proportion of low asset families citing increased school fees as the reason
for borrowing increased from 50.6% to 72.8% between 1981 and 1983.
A study on Brazil (Behrman and Birdsall 1983), a country with high drop out and
repetition rates, has concluded that it may be better to focus on providing better
education to a smaller proportion of the age group than to expand provision to reach
everyone. If the costs of keeping one child in school for six years are similar to those of
keeping three children in school for two years the former is argued to be likely to result
in greater net productivity gains. Fees can only have a limited impact on the problem.
Birdsall (1982) argues that a doubling of urban school expenditures could be achieved
with fee levels at about 5°/0 of the reported monthly income of urban heads of
households. In rural schools, where the need to improve quality is greatest, the fee
levels that would be necessary are so high that they would not be sustainable by poor
families. In the poorest areas only one third of the poorest children attend school whilst
nine tenths of the richest do; any fee levying would almost certainly worsen this uneven
distribution.
2.5.3 Loans
Loans are another method of transferring costs from the state to individuals. The focus
has been on higher education and little emphasis has been given to their use at lower
levels. Many countries now operate some form of loan system. Woodhall (1983)
identified schemes in 18 Latin American countries, and six in Africa and Asia; by 1992
more than 30 schemes existed (Woodhall 1987:89). Few if any loan programmes
appear to be fully financing and it seems unlikely that any can become so in less than
20 years (Psacharopoulos and Woodhall 1985). Loan programmes do work in the sense
that they are utilised and that poor students do take advantage of them. However, the
Colombian case (Jallade 1974) seems to indicate that they may not be redistributive
(since rich students make up the majority of loan takers) and they may serve to channel
public finance into private institutions (private universities benefited from the fees paid
through government loans). There are also -problems associated with the erosion of the
value of repayments by inflation where fixed or zero interest rates are employed; and
with defaulters from whom it may not be economic to recover loans through legal
sanctions. Loans schemes can transfer significant costs to individuals in the long term,
assuming repayment at close to real terms, but such arrangements are politically
unpopular, and involve significant start up and administrative costs. It may be that