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Income Contingent Loans for Mature Aged Training


  • Bruce Chapman

    () (The Australian National University)

  • Tim Higgins

    (The Australian National University)


It is arguably the case that insufficient income support is restricting the educational choices of mature aged persons with dependants and other financial burdens. Removing financial barriers to further education may improve the opportunities for mature aged persons to re-skill, enabling transitions to specific areas of labour force demand. There is evidence, albeit indirect and suggestive only, of unmet demand for additional financial assistance to facilitate higher education investments of the mature aged. Survey data may be interpreted to indicate that an important policy issue exists, and this is the motivation for our exercise. As a possible solution to unmet demand we analyse, explain and promote the idea that the Higher Education Contribution Scheme (HECS) mechanism could be used to supplement significantly the income available for mature aged human capital investment. The major contribution of this work is the illustration of the consequences of a HECS-type policy for mature aged training, in two main regards: the structure of loan repayments for particular hypothetical families; and the implications of our scheme design for government outlays, revenues and implicit taxpayer subsidies. A broad conclusion is that there seems to be a real possibility for the design of a scheme in this area that offers considerable and fair opportunities for additional participation of mature aged trainees with no or little costs to taxpayers.

Suggested Citation

  • Bruce Chapman & Tim Higgins, 2009. "Income Contingent Loans for Mature Aged Training," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 12(2), pages 167-179.
  • Handle: RePEc:ozl:journl:v:12:y:2009:i:2:p:167-179

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    Cited by:

    1. Kenneth Baldwin & Bruce Chapman & Umbu Raya, 2015. "Using Income Contingent Loans for the Financing of the Next Million Australian Solar Rooftops," ANU Working Papers in Economics and Econometrics 2015-627, Australian National University, College of Business and Economics, School of Economics.

    More about this item


    Structure and Scope of Government: General Governmental Loans; Loan Guarantees; Credits; and Grants; Education: Government Policy;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy


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