Researchers believe at least $400m in HECS revenue is lost to graduates moving overseas. Credit:Simon Rankin Is it fair, then, that some graduates escape paying their university debt just because they live in another country? It isn't. We're talking about an equity issue here. After all, graduates living overseas would not be securing jobs in other countries and experiencing life in different cities if they had not studied at an Australian university. The issue is an economic one as well. The government and universities want another funding model to generate much-needed money for the higher education system. The government wants to deregulate tuition fees and many universities are happy to raise them. Requiring graduates working overseas to repay their HECS debt would result in more money for universities.

According to a 2013 Australian National University paper, Australia is missing out on millions of dollars as a result of graduates working overseas. "A conservative estimate of the amount of foregone HECS revenue for the 1989 to 2011 graduate cohorts working overseas is over $400 million," it says. But the authors of the paper, Bruce Chapman, the architect of HECS, and Timothy Higgins, say the real figure is likely to be closer to $800 million. Having a debt hanging over their heads might encourage graduates to stay overseas. Over the years, multiple news reports have been written about New Zealanders escaping their homeland to avoid paying their student loans after the government introduced income contingent loans in 1992.

Stories highlighted the loss of talent from New Zealand. Many graduates moved to Australia. The New Zealand government has acted on student loan debtors living overseas, and it now requires graduates to repay part of their debt. The Chapman and Higgins paper says that since 2006, New Zealand student loans have had a zero nominal rate of interest for those remaining in the country, but a nominal rate of interest of 6.4 per cent a year for those going overseas. The government has also has set annual repayments to be roughly 10 per cent of a borrower's total debt. And it is now a requirement that graduates who go overseas leave contact details with a designated relative to allow the authorities to keep in touch with debtors. British and Swedish graduates who leave their countries are also required to repay part of their loans. Canadians have to, as well.

Meg, a Canadian who goes to Third Degree's gym, has student loans from both the federal government and her provincial government of New Brunswick. She used the loans to pay her tuition fees of about $30,000 for her science degree, as well as living expenses such as rent. Students have to apply for the loans through the government's CanLearn. (In Australia, the loans are automatic.) Some territories and provinces such as the Northwest Territories and Quebec do not participate in the federal government's Canadian Student Loan programs and have their own financial support for students. Students start repaying loans six months after they have graduated, but interest is incurred during this time. There is a Loan Repayment Estimator tool that graduates can use to see how much money they need to repay each month. There is a limit to how much students can borrow. Despite the Canadian loan system being much more cumbersome than the Australian one, it does keep tabs on graduates living overseas. Meg pays $450 a month towards clearing her "integrated loans" (her federal and provincial government loans). She pays the highest repayment rate, despite working as a schoolteacher in Melbourne. It is the same rate for all Canadian graduates living overseas.

In the debates about Australian tuition fees, there has been little spotlight on recovering loans from graduates living overseas. It is time serious thought was put into the kind of mechanisms that could be used so graduates working overseas pay off their debt, just like those living in Australia. Tax experts Richard Highfield and Neil Warren, who have written a new paper about HECS debt, suggest that money could be generated for higher education by requiring graduates living overseas to repay their loans. Links The costs of unpaid HECS debts from graduates going overseas by Bruce Chapman and Timothy Higgins. canlearn.ca