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In many respects, the performances of European universities are poor, as compared to North-American universities. A major reason for their problems is the lack of funding. Substantial increases in tuition and fees do not seem to be politically feasible because so many students are financially constrained: the major problem of European universities is the under-development of student loans. We compare various student-loan systems and focus on loans with income-contingent reimbursement. We suggest that State intervention is needed to overcome a number of difficulties in the development of this form of finance.