Panel examines feasibility of international student loans

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Created on Thursday, 19 January 2012 17:11

Written by Editorial staff

The tertiary education industry could soon be set to receive a boost in business if a team of experts are able to find a way to deliver international students with HECS-style loans.

A three-year study is being funded by a $40,000 grant from the Australian Research Council (ARC) into the feasibility of providing foreign nationals wishing to study abroad.

On the team is Dr Bruce Chapman - one of the chief architects of the Higher Education Contribution Scheme (HECS) - and chief executive of Universities Australia Dr Glenn Withers.

Their combined experience will be challenged by a complex mix of international business laws, changes to migration visas, subsidies, source of loans and the details of repayment.

The team will need to navigate a number of state regulations regarding the mix of public and private funds being lent to international visitors to come up with a scheme that is profitable to those providing the funds and that boosts foreign exchange numbers.

However, Chapman told The Australian on January 18 that any amount of assistance would be helpful, as many of the 180,000 international students currently in the country have to pay around $20,000 "up front" each year in fees.

Chapman asserted: "If they could find a way of paying it back later, depending on their future income, that would take away a major barrier."

Withers agreed with his counterparts view, saying that the implementation of a tiered repayment system could bring new life to an industry that had experienced some tough times and could help to keep it "ahead of the game" in what is already a competitive market.

The chief executive explained: "Having pioneered HECS and knowing how it all operates, [a similar scheme] could be another way of keeping at the forefront at a time lots of other competitors want to enter that arena."

Applicants for a student visa in higher education - the 573 subclass - need to meet a stringent range of criteria set out by the Department of Immigration and Citizenship (DIAC).

In the past these were noted by the Knight Review as proving to limit the volume of international applicants - which in turn was contributing to a decrease in funds that was hindering the tertiary education industry.

Some of these issues were dealt with directly by the DIAC, which reduced the financial requirements for some students and made flexible concessions for English tests across a number of categories.

If successful, the implementation of an officially sanctioned tiered loan scheme could improve the prospects for the industry as a whole.