The Access Implications of Income-Contingent Charges for Higher Education: Lessons from Australia

This paper describes the Higher Education Contribution Scheme (HECS), Australia's income-contingent charge mechanism, and analyses its impact on the social composition of university participation. We consider university participation data from three cohorts of young Australians. The first completed their schooling prior to HECS, the second following its introduction and the third after the scheme was amended substantially. We find that the social composition of participants was different in 1999 from that of 1988: the distribution was more equal. That outcome reflected strong relative growth in participation in the middle of the wealth distribution. Other aspects of university participation also changed: participation grew more strongly among females than males. We find no evidence that participation fell among 'marginal decision makers'-those who, while at school, did not intend to study at university. We conclude that HECS did not discourage university participation in general or among individuals from low wealth groups.