Reform for Colombian student loans system receives accolade

Bruce Chapman headshot

3 minute read

Emeritus Professor of Economics Bruce Chapman from The Australian National University (ANU) College of Business and Economics (CBE), and Professor Lorraine Dearden from University College London, have received the Outstanding Public Policy Impact award in the 2022 UK Economic and Social Research Council (ESRC) Celebrating Impact Prize.

Now in its 10th year, the ESRC Celebrating Impact Prize is an annual recognition of ESRC-funded researchers who have enabled outstanding economic or societal impact with their research. Bruce and Lorraine received the accolade for their project ‘Transforming student loans for Higher Education in Colombia’.

In November 2021, Colombia legislated for reforms to their student-loan system. Change would overhaul a 70-year-old system that required students to make payments on their student loans, regardless of their income. This led to major difficulties for student debtors and poor revenue streams for the government.

Working with the Colombian government, Bruce and Lorraine helped reform the student-loan system into one that resembled Australia’s Higher Education Contribution Scheme (HECS), a system with repayments contingent on the income of the debtor.

“The existing system in Colombia was leading to hundreds of thousands of students and graduates defaulting on their loans and ending up with ruined credit reputations,” says Bruce.

The highly progressive changes to the system begin in January 2023, with the eventual goal being that no loan holders will have to worry about defaulting on their loan in Colombia.

Bruce thanks CBE Dean Professor Steven Roberts, ANU Research School of Economics Director Professor Rabee Tourky and ANU Research School of Finance, Actuarial Studies and Statistics Director Associate Professor Stephen Sault for their involvement.

“This is a very pleasing outcome. I am personally very gratified that CBE helped so much with this. And not just me, Lorraine was a CBE visitor several times and this added importantly to the joint work, which led to the award,” shares Bruce.

Bruce and Lorraine side by side holding their awards

“I am indebted to Steven, Rabee and Stephen for their unambiguous support and commitment.”

Professor Rabee Tourky recognised the impact of Bruce’s accomplishment:

“The ANU has a remarkable history of public policy impact in Australia and overseas. Translational and transformative research that changes the world is the hallmark of our great University,” he says.

“We are honoured to have Bruce as a colleague, and congratulate Professor Dearden and Professor Chapman for receiving this prestigious award.”

Bruce is the architect of Australia’s HECS. He has worked at ANU since 1984, lecturing in economic policy and applied econometrics. His research interests span labour economics, the economics of education, the economics of crime, and of sport.

His work has appeared in economics journals including Australian Economic Review, Education Economics, the Economic Journal, the Review of Economics and Statistics, Australian Journal of Labour Economics and Economics of Education Review.

Lorraine is both a CBE alumni and a Professor of Economics and Social Statistics at the Social Research Institute, University College London, and is highly regarded internationally for her outstanding econometric skills. She is currently involved with Bruce in the design of student loans in a number of countries, which arose from her work for the ESRC.

She is Associate Editor for the Journal of the Royal Statistical Society, Series A, an IZA Institute of Labor Economics Fellow and a Fellow of the Academy of Social Science.

Learn more about Bruce and Lorraine's project in the video produced by the Economic and Social Research Council.

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