policy impacts


Prior to 1974 students in Australia were required to pay university fees, though 75-80 percent were on scholarships that covered this expense. This changed in 1974 when the Whitlam Government abolished university fees. In 1986, the introduction of the Higher Education Administrative Charge (HEAC) signaled the beginning of the re-establishment of university fees. John Dawkins and Peter Walsh, who were the Ministers respectively for Education, Employment and Youth Affairs, and Finance, were in favour of reintroducing student fees, as they believed a no-fee system was regressive. Socio-advantaged students tended to attend university and then reaped the higher economic benefits, with a no-charge system being financed from the taxes of all citizens. There were also concerns about unmet demand for university places; however, fiscal pressures meant the government did not want to spend more on universities.

Bruce Chapman being presented with Australian Financial Review Higher Education Lifetime Achievement Award, by John Dawkins, for his work on HECS. Photo by Ryan Stuart.

In 1987, John Dawkins invited Bruce Chapman to write a report evaluating several options for the re-establishment of student fees. The task was to not just have fees, but to design a tuition system which did not affect the access of less advantaged students. In his paper Bruce outlined several options, including: up-front fees with scholarships; up-front fees with government subsidised bank loans; and income contingent loans (ICL). On the grounds of equity and access, Bruce recommended an ICL system, with repayments made through the tax system. However, there were several potential problems. Notably, the system was untried, and the support of the income tax authority (the Australian Tax Office) was needed. Furthermore, Gough Whitlam, the Labor Prime Minister who abolished fees, was an Australian Labor Party (ALP) icon, and had fiercely advocated for free education.

Anticipating backlash, Dawkins set up a committee which was chaired by former ALP Premier Neville Wran, to evaluate the options in Bruce’s paper. In 1988 the Wran Committee released a report recommending the ICL system and the Higher Education Contribution Scheme (HECS), became policy in 1989. Students could pay their fees upfront, or take out an ICL, with the first repayment threshold set at average weekly earnings. In 1997, under a new Coalition government, charge levels increased, differential charges by course were introduced, and the repayment threshold fell significantly. In 2005 changes were again made, which reversed some of this 1997 decision, and extended HECS for full-fee paying domestic students. An overarching scheme known as Higher Education Loans Program (HELP) was introduced to encompass these additions. Since then, Bruce, who is considered the ‘architect’ of the scheme, has consulted on developments to HECS in many countries. Recently, Bruce worked with CISLR’s Tim Higgins to help devise a way to collect debts from borrowers who move overseas.  


ICLs were first proposed in Brazil in 1979, in an IPEA working paper (IPEA is a well-recognised think tank in Brazil). The proposition was that the existing federal student loan scheme at that time was transformed into an ICL. The proposal was not carried forward and ICLs remained forgotten in Brazil, until they returned to the public debate during the reforms of 2015 and 2017 in the FIES, the current federal student loan scheme. Since 2018, undergraduate students enrolled in private institutions can take loans to cover their tuition fees and their repayments in the future will mostly be income-based and collected through an employer withholding system. 

Paulo Nascimento at the Challenges of Higher Education Seminar, in Brazil. Photo by Reinaldo Canato from Folhapress.

As a research officer from IPEA, Paulo Nascimento‘s work has been influential in Brazil’s debate on higher education student financing. Paulo has been publishing journal articles, working papersbook chapterspolicy briefs and a doctoral thesis about ICLs. His Doctoral thesis was co-supervised by Bruce Chapman and received an honourable mention in the Capes Thesis Award, 2019, which is a national award in Brazil. In his work, Paulo argues that further reforms could bring the current system closer to international best practice on student financing. He has also participated in discussions with the Brazilian Government. 

Bruce Chapman, Lorraine Dearden, Tim Higgins and Dung Doan have also participated in discussions with government officials from Brazil, when the officials visited Australia in 2017. Furthermore, Bruce Chapman and Lorraine Dearden were keynote speakers at a workshop organised in Brasilia, by the Brazilian government in February 2018. 

A major conference took place in July 2019 in Brasilia. Bruce, Dung, Paulo, Lorraine, Tim and Susan Dynarski all attended the event. In addition, the conference had the participation of Ludger Woessmann (Munich University, Germany), Miguel Palacios (University of Calgary, Canada), Ricardo Paredes (Rector of Duoc UC and full professor at Universidad de Chile), Andrea Doneschi (Universidad de la Republica, Uruguay), Jorge Tellez Fuentes (executive director at the APICE – Pan American Association of Institutions of Educational Credit), Manoel Acevedo-Jaramillo (President of ICETEX – Colombian Institute of Educational Credit and Technical Studies Abroad), Simon Schwartzman (ABC – Brazilian Academy of Sciences), Sergei Soares (IPEA, Brazil), Timothy Kane (Australian Ambassador in Brazil), Gino Bartone (Australian Taxation Office), Mathew Johnston (Australian Government Department of Education), and over 70 people government officials, academics and journalists from Brazil. Presentations are available here, and pictures can be viewed here

In addition to the reforms to the federal student loan arrangement, there is an ongoing debate in Brazil about the effectiveness of introducing fees in the currently free-of-charge public universities, as a way to raise additional resources for these institutions. ICLs are in the centre of this policy debate, in part due to Paulo’s research and contributions from other CISLR members. 


In 2004, Bruce Chapman was invited to help the Colombian government with respect to its time based repayment loan (TBRL) scheme, administered by ICETEX, the Colombian student loan agency. He spent a week with Colombian officials examining ICETEX’s current scheme, and it became clear that this scheme could not work without major costs to both debtors and the government. He encouraged the Colombian government to replace the scheme with an ICL, but this did not happen at the time.

Bruce Chapman media interview

Since then, research from CISLR members Lorraine and Gabrielle has shown that Colombian students face unsustainably high repayment burdens under the current ICETEX administered scheme, and that a large proportion of beneficiaries are likely to experience hardships associated with default. These problems were also recognised by ICETEX, and in 2016 Colombian student loan officials, including the director of ICETEX, visited Australia to enquire further about the income contingent loan option.

Since then Lorraine and Bruce have been involved in empirical research and policy discussion with respect to Colombia’s student loan scheme. Bruce and Lorraine returned in Colombia in 2017, where they held press briefings and presentations on income contingent-student loan design. Here is Bruce presenting the arguments for an ICL in Colombia.

In July of 2018 Colombia passed a bill that commits to the establishment of a fund that will provide income contingent loans to university students from 2019. Loans will be available for living expenses as well as tuition fees. The specifics of this program are still in formation, and we are currently involved in helping model possible income contingent loan systems that would work for Colombia.


The debate about higher education (HE) funding has been particularly active in Ireland since 2014, because the 2008 financial crisis led to government funding for HE being slashed. This caused a widely-acknowledged funding crisis, so in 2014 the government appointed an Expert Group on Future Funding for Higher Education to examine the cost implications of alternatives for increasing HE funding.

Bruce Chapman, Lorraine Dearden, Dr. Charles Larkin, Senator Aodhán Ó Ríordán and Aedín Doris, at an ICL conference in Dublin

Between 2015 and 2017, several members of CISLR were prominently involved in this important policy debate. Aedín Doris was asked to contribute to the report of the Expert Group in a chapter discussing income-contingent student loans as a possible solution to the HE funding crisis. Aedín’s contribution to the report, published in 2016, grew out of her research with Bruce Chapman on how to model higher education financing reform for Ireland. As a result of this work, Aedín was twice called to give evidence to the Irish parliamentary committee on education regarding income-contingent loans; on the second of these occasions, she gave evidence jointly with fellow CISLR member Darragh Flannery.

In addition, Aedín organised and presented to several national conferences on higher education funding. BruceLorraine Dearden and Nicholas Barr also presented at Irish conferences addressing the student loans issue—in Bruce’s case, three times between 2015 and 2017. In addition, Aedín and Bruce wrote op-eds for national and student newspapers, and both Aedín and Darragh gave radio interviews and wrote blog posts on the subject of income-contingent student loans.

More pressing political issues such as Brexit have led to HE funding being de-prioritized in 2018, but CISLR members will be happy to step up and share their expertise if and when the Irish government decides to reconsider the issue.


There have been recent important developments with respect to Japan in a series of events and a research project organised by Shiro Armstrong, Director of the Australia Japan Research Centre, ANU.

Higher Education Financing Issues for Japan Conference in Tokyo, September 2017

In February 2017, Bruce and Lorraine were invited to Japan to discuss solutions to student loan and higher education funding. They met with government officials, policy makers and participated in two forums on the issue. At the invitation of Shiro, to further examine Australia’s experience with ICLs, Japanese policy makers visited ANU in August. In October 2017, Shiro, Bruce and Lorraine visited Japan again. 

In the most recent visit, Bruce and Lorraine presented several talks at a research conference and participated at a public forum, opened by the Japanese Minister for Education, Vice Minister for Education and the ANU Vice Chancellor Brian Schmidt. This involved the presentation of empirical analysis that has been the result of a highly productive collaboration on Japanese student loan experience, in a project involving Lorraine and CISLR’s Nagase Nobuko

The topic was also considered in major media conference which was attended by about 30 of Japan’s most respected journalists. The response to the idea of an ICL was extremely positive and Bruce and Lorraine are in close contact with officials with an expectation of further progress shortly.


In 2012, the National Higher Education Fund Corporation (NHEFC), or popularly known as PTPTN, commissioned research on transforming Higher Education Funding in Malaysia. The study was led by Russayani Ismail from the School of Economics, Finance and Banking, Universiti Utara Malaysia. Bruce Chapman and Professor Tilak from the National University of Educational Planning and Administration (NUEPA) were also invited to join and work on developing an optimal student financing mechanism. The study proposed that ICLs should replace the current mortgage type loans.  However, the previous government, under the Barisan Nasional Coalition, decided to postpone the introduction of ICLs. Changes were made to the repayment mechanism, where repayment through salary deduction was introduced, though it was not compulsory.

PenDaPaT 2018 PTPTN: Between Access, Equity and Sustainability Higher Education Discourse Programme in Malaysia, November 2018. Photo by Muhammad Shamsul Shafie.

In May 2018, the Pakatan Harapan won the general election and a new government was formed. Based on the Pakatan Harapan’s manifesto, student loans issues will be addressed. The government has pledged to postpone the study loan repayment for those earning below RM4,000 a month, as well as not blacklisting defaulters. While the move of not blacklisting defaulters is appropriate considering the welfare of graduates, the repayment threshold of RM4000 is too high and this will ultimately affect the sustainability of PTPTN. The Malaysian Society for Higher Education Policy & Research Development (PenDaPaT), in which Russayani is also a member, has submitted a memorandum to the Minister of Education highlighting various profound issues related to Higher Education that need reform, particularly PTPTN. PenDaPaT believes that the current mortgage type loans need to be reviewed. 

On the 2 November 2018, during the budget speech for 2019, the Minister of Finance announced that the repayment of student loans under PTPTN will be contingent upon income, at the rate of 2 percent to 15 percent of graduates’ monthly income. The threshold has been set at RM1000, but after some protest this was initially raised to RM2,000 before being suspended altogether in early December. Mr Fawwaz Aminudin was instead engaged to explore financing options for Malaysia and the possibility, and implications, of converting PTPTN into an income-contingent loan based on the Australian approach. He is due to report later in 2019. 

In March 2019, Bruce Chapman was approached by officials from the Australian Department of Foreign Affairs and Trade (DFAT) and the Australian Department of Education (DET), to visit Malaysia and visit key officials involved in the review as well as PTPTN and government officials. His visit was motivated by two goals: one, to help explain to officials broadly, and senior members of PTPTN specifically, conceptual and policy design issues related to higher education financing reform; and two, to examine and understand the approaches to modelling PTPTN loans being undertaken by Mr Aminudin and his team. A critical aspect of the second was to develop methods and ideas related to the potential further modelling contributions for PTPTN.  Bruce, Lorraine Dearden, and Mr Louis Hodge visited Malaysia between 20-26 March 2019 to carry out the modelling and train officials in the use of the model.

Bernadine Caruana, Counsellor (Education and Science) at the Australian High Commission organised the agenda, meetings and briefings and contributed greatly to the success of the visit.  We held a day and a half long sessions with PTPTN officials and PTPTN consulting team led by Mr Fawwaz Aminudin to discuss our modelling methodology and to discuss loan proposals which are under consideration on Thursday 21st March and Friday 22nd March. We held a seminar on loan design at the Australian High Commission on the afternoon of Friday 22nd March. We built two student loan models (an easy to use but slow Excel model and a faster but more complicated model in Stata) to carry out this work and incorporated Malaysian micro data which was provided to us on Thursday 21nd March. These models are now available to all officials who attended the model training on Monday 25th March and Tuesday 26th March and others nominated by PTPTN on a shared dropbox folder. We presented a paper showing the outcome of our initial modelling work and produced earnings profiles of Malaysian graduates by gender to show the potential problems of having a high first threshold on Monday 25th March. We held a meeting with Mr Wan Saiful Wan Jan, Chairman of PTPTN on Friday 22nd March. We held a meeting with Faris Rabidin – Board member of Securities Commission, representing the Debt and Liability Management Committee set up under the Prime Minister’s office, on Monday 25th March. We attended a press conference on Tuesday 26th March with a number of local media providers. Coverage of this can be found here and also here.


south korea

South Korea currently has two main government-provided loan schemes for tertiary students, both administered by the Korea Student Aid Foundation: an ICL and a time-based repayment loan (TBRL). Established in 2009, both loan schemes cover tuition fees and stipends, yet with different eligibility criteria, maximum loan sizes, and repayment arrangements. The ICL is only available for students from the bottom 80 per cent of households, whereas the TBRL is available to students from all economic backgrounds. While coverage of the ICL has been steadily increasing since its introduction, the scheme covers only about 36 per cent of undergraduate students as of 2014, compared to 29 per cent by the TBRL. 

A special feature of Korea’s labour market is that a large proportion of graduates below 30 years old do not have any earnings, mostly because they delay participation in the labour force to wait and prepare for a public-sector job. This imposes important challenges to the collection of loan repayments and the assessment of the financial stress associated with student debt repayment based on debtor’s own income. 

In a presentation at the ANU’s Tax and Transfer Policy Institute conference in November 2017, Dung Doan reported evidence that ignoring the potential intra-household resource allocation would significantly over-estimate the repayment burden associated with TBRL in Korea, where a signficant portion of young graduate debtors are most likely financially dependent on their family. 


In the period 1996 to 2006 Bruce Chapman was asked to present policy options and empirical research related to Thailand’s Student Loan Fund, a time-based repayment system that was not working well. He helped design an ICL for Thailand that was introduced in 2006. While this was discontinued in 2007 the Thai government has recently (2017) introduced legislative changes to adopt an ICL.




Higher education financing in England has been subject to near-constant reform over the past two decades. Income contingent loans were first introduced in 1999 to cover  costs of living for students and expanded to cover the costs of fees and living in 2006 when fees were increased from £1,000 to £3,000 per year. The most notable change in policy was the 2012 trebling of tuition fees to £9,000.

CISLR researchers, Professor Nicholas Barr, Professor Lorraine Dearden and Dr Gillian Wyness have been at the forefront of analysing, guiding and influencing higher education finance and student loan reforms in the UK.

Professor Nicholas Barr has been working in this area for over 30 years and and he has been active in the debate about financing higher education, advocating a system of income-contingent student loans collected alongside income tax or social security contributions. In the UK, he argued for many years for tuition fees fully covered by income-contingent loans, and he and his colleague Iain Crawford have been described as the architects of the 2006 reforms in England. He led the team that designed the student loan system in Hungary and has advised governments in Australia, New Zealand and Chile. His impact case study (top-rated in the UK 2014 Research Assessment Framework), can be found here and the associated video here.

Professor Lorraine Dearden was instrumental in developing a model at the Institute for Fiscal Studies which used  microeconomic data to model the distributional impacts of different HE financing systems. There have been numerous IFS reports on the implications of different funding models and reforms using this model and the initial work was published in the Economic Journal in 2008. She has drawn on this work and used the methodology outlined in that paper in a number of countries and this forms the focus of her recent paper in the Economics of Education Review on Evaluating and designing student loan systems: an overview of empirical approaches.   She has given numerous presentations on UK HE financing including the keynote talk at the Centre for Global Higher Education conference in 2017, at the Resolution Foundation in 2017 and a response to the Augar review at a WONKHE event on ‘Counting the cost’ on 2 July 2019

Gillian Wyness and Lorraine Dearden have also done significant research on HE funding and student access.  Articles by Dearden, Fitzsimons and Wyness in (2014) and Wyness, Judith Scott-Clayton and Richard Murphy in 2019 as well as an OUP book by Dearden with Claire Crawford, John Micklewright and Anna Vignoles in 2017 has looked at the impact of the introduction of fee and higher education funding reform on access to HE. All evidence suggests that the reforms have increased participation of the poorest students compared to more advantaged students. Dearden recently gave a public lecture at ANU on this issue drawing on the English experience. Her slides can be found here.


CISLR researchers Susan Dynarski has been a key player in the US loan and financing debate and began working with other CISLR researchers, Nick Barr, Bruce Chapman and Lorraine Dearden as a result of a conference held in Washington in June 2016 on “Restructuring Student Loans: Lessons from abroad”. This conference culminated in a report and publication which was recently published in the Economics of Education Review  (see Barr, N., Chapman, B. J., Dearden, L., & Dynarski, S. M. (2019). ‘The US College Loans System: Lessons from Australia and England’, Economics of Education Review, vol. 71, issue C, 32—48. The article suggests that the U.S. could reduce student loan default by moving from the current repayment system, based on mortgage-style fixed repayments, to a well-designed and run income-contingent loan program. 

Susan Dynarski has used this article and other research to testify in front of the United States Senate Health, Education, Labor & Pensions Committee (HELP) hearing “Reauthorizing the Higher Education Act: Financial Aid Simplification and Transparency.” on  18 January 18 2018. Read Susan Dynarski’s written testimony. Read the Michigan News release, “Simplifying higher ed financial aid: U-Michigan professor to testify before Congress.” Dynarski’s testimony focussed on the U.S. student loan market, current student loan policy, and improvements geared at making borrowing work for students.

Dynarski’s student loan research has also featured in many newspaper articles and policy briefs as can be seen here. Her most recent policy briefing can be found here.


Higher Education Financing: The Needs and Potential for Reforms in Vietnam. Photo by Institute of Social Sciences Information.

In 2015, the Vietnamese government issued a decree (86/2015/ND-CP) that gradually grants financial autonomy to the country’s heavily subsidised public higher education institutions (HEIs). Twenty three HEIs have been allowed to self-finance their recurrent spending (some also self-finance capital spending), with public funding to all HEIs planned to be only on performance contracts after 2021. This has led to substantially higher tuition fees and growing concerns about affordability of higher education. In that context and coupled with limited budget for an extensive grant-based financial assistance system, the country’s current higher education loan system seems unlikely to be able to meet the need to financially support disadvantaged students.

Vietnam has a small time-based repayment loan scheme that is only available to the most disadvantaged students. As of the first half of 2017, the scheme covered merely 70,000 out of approximately 2.2 million enrolled students. Beside its limited coverage, the loan has a relatively high interest rate and short repayment period, which arguably creates heavy repayment burdens to debtors.

In July 2018, Bruce Chapman and Dung Doan, in collaboration with the Vietnam Academy of Social Sciences (VASS), organised a conference on higher education financing and the potential for reforms in Vietnam. The conference was attended and well received by a Deputy Minister of Education, senior representatives from the Bank for Social Policy, which administers Vietnam’s student loan scheme, as well as senior executive directors and researchers from local universities and think-tanks. The workshop featured presentations by Bruce Chapman, Lorraine Dearden, and Dung Doan, as well as experts from VASS and the World Bank.

See the news coverage of the conference (in Vietnamese) by ISSIBaomoi, and Petrotimes.

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