Overseas HECS crackdown leads to $127m windfall for taxpayers

Australians living overseas have been forced to pay $127m in old university debts in the past year, as the Morrison government ramps up its crackdown on HECS evaders.

Education Minister Dan Tehan. Picture: AAP

Australians living overseas have been forced to pay $127m in university debts over the past year, as the Morrison government cracks down on HECS-HELP evaders.

The amount of debts recouped from citizens overseas increased by $27m in the 2019-20 financial year after federal Education Minister Dan Tehan lowered the threshold for debt repayments.

People living overseas have had to compulsorily pay back their HECS debt since 2016, and $310m has been paid back since the laws first came into force.

Mr Tehan said on Tuesday the jump in overseas repayments would help to keep the HECS scheme sustainable for future ­university students and provide a windfall for taxpayers.

“If you live in Australia or live overseas, it’s only fair that if you are benefiting from a world-class Australian higher education that you make a contribution towards repaying your student loan,” he told The Australian.

“The Morrison government has introduced changes that have significantly improved the sustainability of the HELP scheme for the benefit of taxpayers and ­future students.”

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The minimum threshold for HECS-HELP repayment was lowered by nearly $10,000 last year to $45,881, down from $55,874 in 2017-18.

There are still more than 42,000 HECS debtors living overseas, according to Australian Taxation Office data from 2018-19, and they owe the nation’s taxpayers a total of $973m in overdue university repayments.

ANU higher education policy expert Andrew Norton said on Tuesday the still large number of overseas debts showed how hard it was to make overseas Australians pay back their HECS-HELP repayments. “It’s actually very hard to make students pay back their debts from overseas and countries that also do this — like New Zealand and Britain — have had a lot of trouble with it,” he said.

The new figures on overseas HECS repayments come amid Mr Tehan’s debts crackdown on domestic-based students, with his “Job-ready” university reforms cutting off access to the scheme to students who fail more than half of their first year subjects.

According to the Department of Education, there are 139 people with a Higher Education Loan Program (HELP) debt valued at more than $200,000, with one person owing about $465,000 and another $355,000.

In 2018 alone, one student enrolled with 21 different providers, undertaking more than 15 years of study, incurring a $113,900 HELP debt, while only passing 6 per cent of the collective set of units they attempted in these courses.

The university reforms — which also cut the price of post-pandemic job-creator courses such as maths and science, while raising the cost of law and ­humanities degrees — passed parliament this week after a deal with the South Australian micro-party Centre Alliance.