But there's another form of capital with which people generally are unfamiliar, Becker said. Schooling, a computer training course, expenditures on medical care, and lectures on the virtues of punctuality and honesty are capital too in the sense that they improve health, raise earnings, or add to a person's appreciation of literature over much of his or her lifetime. Consequently, it is fully consistent with the capital concept as traditionally defined to say that expenditures on education, training, medical care, etc., are investments in capital. However, these produce human, not physical or financial, capital because you cannot separate a person form his or her knowledge, skills, health, or values the way it is possible to move physical or financial assets while the owner stays put. Economists generally explain the pattern of rising earnings with age by observing that work experience of itself makes people more productive.
Experience is a form of human capital.
Creating educational human capital costs money. Because human capital is intangible, its creation has implications for the financing of education. Lenders cannot secure educational loans with claims on human capital. This makes them reluctant to finance investments in education unless borrowers can put up physical assets as security. Such reluctance is offered as a justification for government guarantees of student loans.