Higher Education Contribution Scheme

Higher Education Contribution Scheme, commonly referred to as HECS, was an Australian tertiary education fee introduced by the Hawke Labor government in January 1989, under the then Minister for Education, John Dawkins.

During the mid-1980s, the Australian tertiary education landscape was fundamentally restructured in order to give broader sections of the population access to higher education. This was also part of a broader push by Treasurer Paul Keating, towards privatising education, to relieve the state finances of the increasing burden of funding universities. The white paper with the title Higher Education: A Policy Statement from 1988 provided detailed information about the intended reforms, which called for the introduction of tuition fees. HECS was developed by Bruce Chapman, Professor of Economics at the Australian National University in Canberra. This contribution model provided for tuition fees to be pre-financed by means of a state loan and repayment only begins after entry over a designated income threshold. HECS consists of three components: firstly, a loan is granted without interest, secondly, the obligation to reimburse tuition fees does not take effect until the debtor's income exceeds a set amount, and thirdly, the repayment is directly income-related. These three components distinguished HECS from the American or British student fee model. Students who make an immediate and complete payment of the tuition fees before the start of the respective academic year were rewarded with a discount of 20% on their HECS debt.