The Costs of Unpaid HECS Debts from Graduates Going Overseas

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. Show more