The Costs of Unpaid HECS Debts from Graduates Going Overseas
31 Pages Posted: 18 Jan 2013 Last revised: 8 Jul 2013
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
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