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The Access Implications of Income Contingent Charges for Higher Education: Lessons from Australia

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Author Info
Bruce Chapman
Chris Ryan

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Abstract

This paper describes the Higher Education Contribution Scheme (HECS), Australia's income contingent charge mechanism, and analyses its impact on the social composition of university participation. We analyse university participation data from three cohorts of young Australians. The first cohort completed their schooling prior to the introduction of HECS, the second following its introduction and the third after the scheme was amended substantially. We find that the social composition of participants was different in 1999 from that of 1988. However, the distribution was more equal than it was in the late 1980s. That outcome reflected the growth in participation in the middle of the wealth distribution, which was stronger than growth at either the top or the bottom of the distribution. Other aspects of university participation also changed: participation grew more strongly among females than males. We find no evidence that participation fell among 'marginal decision makers' - those who, while at school, said they did not intend to study at university. We conclude that HECS did not act to discourage university participation in general or among individuals from the lowest wealth groups.

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Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, Australian National University in its series CEPR Discussion Papers with number 463.

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Length: 40 pages
Date of creation: Apr 2003
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Handle: RePEc:auu:dpaper:463

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier. [Downloadable!] (restricted)
  2. Feldman, Roger, 1976. "Some More Problems with Income-contingent Loans: The Case of Medical Education," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1305-11, December. [Downloadable!] (restricted)
  3. Nerlove, Marc L, 1975. "Some Problems in the Use of Income-contingent Loans for the Finance of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 157-83, February. [Downloadable!] (restricted)
  4. Chapman, Bruce, 2006. "Income Contingent Loans for Higher Education: International Reforms," Handbook of the Economics of Education, Elsevier. [Downloadable!] (restricted)
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  5. Bruce Chapman & Chris Ryan, 2002. "Income-Contingent Financing of Student Charges for Higher Education: Assessing the Australian Innovation," CEPR Discussion Papers 449, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  6. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-51, May. [Downloadable!] (restricted)
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  7. Barrett, Garry F & Crossley, Thomas F & Worswick, Christopher, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 116-38, June.
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  1. Bruce Chapman & Mark Rodrigues & Chris Ryan, 2008. "An Analysis of FEE-HELP in the Vocational Education and Training Sector," CEPR Discussion Papers 570, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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  2. Canton, Erik & Blom, Andreas, 2004. "Can student loans improve accessibility to higher education and student performance? An impact study of the case of SOFES, Mexico," Policy Research Working Paper Series 3425, The World Bank. [Downloadable!]
  3. Bruce Chapman, 2005. "Income Contingent Loans for Higher Education: International Reform," CEPR Discussion Papers 491, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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  4. Erik Canton & Andreas Blom, 2004. "Do student loans improve accessibility to higher education and student performance? An impact study of the SOFES program in Mexico," CPB Discussion Papers 33, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
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