[Excerpt] A widespread phenomenon in less-developed countries-has been the rapid growth of schools and institutions of higher learning resulting in a so-called “education explosion." One possible explanation for the education explosion is that education is a profitable personal investment, as evidenced by high private rates of return. The high private returns are translated into demands on politicians for additional schooling spaces. To gain or maintain public favor, each politician uses his influence to try to increase the number of schools in his constituency. By this chain of events, growth of educational systems might be anticipated as long as private rates of return remain high. This would add to the already high fiscal burden of providing education and might prove to be a drain on the resources of the governments of many less developed countries. We have selected Kenya as a case study for analyzing this phenomenon. This paper has two purposes: to consider the effect of some recent developments on the private rates of return to higher levels of schooling, and to determine what would happen to the private rates of return under a number of alternative loan programs. The higher levels of education we consider in this paper are university education, secondary teacher training, primary, teacher training, and higher secondary education.