The Costs of Unpaid HECS Debts from Graduates Going Overseas

31 Pages Posted: 18 Jan 2013 Last revised: 8 Jul 2013

See all articles by Bruce Chapman

Bruce Chapman

Australian National University, Research School of Social Sciences (RSSS) - Economics Program; Australian National University (ANU) - Crawford School of Public Policy

Tim Higgins

Australian National University (ANU) - College of Business and Economics

Date Written: January 17, 2013

Abstract

HECS is an income contingent loan designed to collect tuition from Australian university students. The debt is collected on the basis of recorded incomes and as a consequence, debtors living overseas will not repay. Using various data sources and assumptions, multiple scenarios are considered in order to estimate the extent of uncollected overseas debt. A conservative estimate of the amount of foregone HECS revenue for the 1989 to 2011 graduate cohorts working overseas is over $400 million, but it is shown that under other plausible assumptions the foregone revenue may be close to double this amount.

Keywords: income contingent loan, HECS, emigration

Suggested Citation

Chapman, Bruce James and Higgins, Tim, The Costs of Unpaid HECS Debts from Graduates Going Overseas (January 17, 2013). Crawford School Research Paper No. 13-03, Available at SSRN: https://ssrn.com/abstract=2202574

Bruce James Chapman (Contact Author)

Australian National University, Research School of Social Sciences (RSSS) - Economics Program ( email )

HC Coombs Building
Australian National University
Canberra, Australian Capital Territory 0200
Australia

Australian National University (ANU) - Crawford School of Public Policy

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Tim Higgins

Australian National University (ANU) - College of Business and Economics ( email )

Canberra
Australia

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