The truth behind moving overseas to avoid paying your HECS debt

February 24, 2015
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Rising university fees, proposals for deregulation, and skyrocketing debts are all threatening to hobble tomorrow’s workforce. Graduates are already feeling the crunch of mounting fees, and with student debt set to propel further – many youth are souring on degrees.

But if higher education is the ticket to your dream career, then you’ll likely have to deal with a HECS debt. Unless, like Business and Economics graduate Nick – you also intend to work overseas.

Much to the displeasure of the Australian government, students can dodge their debts. As the law currently stands, an individual’s university loan only requires repayment if they are earning a taxable income in Australia. Leaving the country doesn’t wash your hands of government debt however, as the debt never disappears.

There’s no simple mechanism in place to retrace and collect loan repayments from overseas students. If someone is abroad and outside the Australian tax system, it’s too difficult to track down how much they are earning and calculate loan deductions.

Nick chose to have his surname undisclosed, but told Hijacked he made the decision to move to the United States after meeting his wife-to-be while travelling. He says his decision came down to purely other factors, but his HECS evasion was ‘collateral’.

“I ended up meeting my wife while travelling. We decided to move to the US after we were married but my HECS loans didn’t factor into our decision,” said Nick. “I do think university is too expensive no matter where you are in the world though. It should be available to everyone which, with the high costs right now, it is not.”

Nick is sure that avoiding repayments will be a “huge factor” for some in choosing to work abroad, but he urges that people “don’t treat it as the deciding factor”.

Students have to consider whether they have other motivations to live and work overseas, and if not – is the sacrifice worth the savings?

Taxpayers essentially gift you a degree completely free – providing you live there. And you’ll probably earn far more in London or New York than you would in Melbourne. Of course, having to leave family, friends and a home origin isn’t for everybody. The financial justification to do so however, is at an all-time high.

Students have to consider whether they have other motivations to live and work overseas, and if not – is the sacrifice worth the savings?

Higher education researcher Dr Geoff Sharrock told Hijacked that there are so many students choosing to work internationally that the Australian government is amassing a significant debt in unpaid HECS loans.

The government is unlikely to ever be repaid an estimated $6.2 billion in HECS debt. Partly because some students won’t earn the minimum $51,000 a year required before repayments are deducted, and mostly because of overseas relocation.

Sharrock urges that finding a way to recover funds from overseas students is necessary to prevent Australian students being hit even harder by fees as a result.

“What’s been suggested – is that if students travelling overseas for extended periods of time, it would make sense that those students should basically build into their travel or overseas arrangement so that each year they pay the equivalent of around three thousand and that figure is based roughly around four percent of 60,000 dollars.”

If you have, or are soon to graduate, and you don’t plan to work here – time is of the essence. HECS recovery policy discussions are becoming more frequent, and it may only be a matter of time before you even have to pay off your education from the middle of Antarctica.

Rowan Forster

Rowan is a third year journalism student at RMIT University. He recently discovered that avocado is actually a fruit, and not a yoghurt.

Image: Gavin Bannerman, Flickr Creative Commons license

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