Taking income contingent loans to the world

By Geoff Maslen – in University World News.

At least eight countries around the world have adopted versions of Australia’s Higher Education Contribution Scheme. Known as HECS, the scheme requires students to pay some of the cost of their degrees and the remainder through a government loan.

HECS was introduced in 1989 by the Australian government and is a process whereby the loan is repaid through the tax system, depending on the participant’s income. This arrangement is known as an income contingent loan, or ICL.

ICLs differ critically from ‘normal’ loans in that repayments occur if and only when the debtor’s income reaches a given level. And if it doesn’t ever reach this level, then no payments are ever required.



Povl Tiedemann
March 2015


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