The Costs of Unpaid Higher Education Contribution Scheme Debts of Graduates Working Abroad

14 Pages Posted: 3 Sep 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: September 2013

Abstract

The Higher Education Contribution Scheme (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 1989–2011 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.

Suggested Citation

Chapman, Bruce James and Higgins, Tim, The Costs of Unpaid Higher Education Contribution Scheme Debts of Graduates Working Abroad (September 2013). Australian Economic Review, Vol. 46, Issue 3, pp. 286-299, 2013, Available at SSRN: https://ssrn.com/abstract=2319599 or http://dx.doi.org/10.1111/j.1467-8462.2013.12014.x

Bruce James Chapman

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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