policy & reform
In fact, Chapman says there is a case for making HECS fully accessible across all of the TAFE systems, and potentially adding it as a component of youth allowance to help poorer potential students access tertiary education.
“ It’ s always been a big disappointment to me that income-contingent loans – that is HECS – are not all through tertiary education including all TAFE,” he says.
Chapman does say there is also a case for introducing a rate of interest. But he also says the selling of the HECS debt to commercial enterprises would be“ shocking economic policy” if it were to go ahead. He says it could result in raised costs to students and less income for the government.
Last October, the education minister, Christopher Pyne, said he would not rule out selling off debt associated with HELP. However, a spokesperson for the minister recently said the Abbott Government did not plan to sell any debt the program generated or privatise the scheme.
Economics expert professor Phil Lewis from the University of Canberra’ s faculty of business and government says the system seems to have been a success, given its objective to expand access to university via financial assistance.
On the question of whether students should be paying an interest on the debt, he says,“ We certainly don’ t want any change that is going to prevent poorer students from attending university.”
Belinda Robinson, CEO of Universities Australia, says any changes to the HECS-HELP loan system should be made carefully and that all the implications should be understood comprehensively beforehand.
Robinson says the HECS-HELP system has provided a sustainable funding model for governments.
“ Without this financing mechanism, fewer university places would be available and overall accessibility compromised,” she says.
The Universities Australia Student Finance Survey from 2012 states that students face less risk through HELP debt than with other forms that accrue commercial rates of interest.
Adjunct professor Gavin Moodie from RMIT University agrees that student-income contingent loans are successful and he even makes a case for the scheme to be extended to cover living expenses.
The Universities Australia finance survey found that a majority of students would support such an expansion and, Moodie says,“ The Australian Government should also consider providing income-contingent loans for international students.” n
Labor’ s view
Shadow minister for higher education, Senator Kim Carr, says the current system serves students and the nation at large well, with high repayment rates.
He adds there is no problem with student debt and that the income-contingent loans ensure education costs are paid back in a fair and manageable way.
“ Students owe on average about $ 16,000,” Carr says,“ More than 80 per cent of debt will be repaid, and this is factored into budget planning.
“ These loans are a sound national investment with high social and economic returns.”
If fees were hiked and interest charged, prospective students would be deterred from engaging in higher education, he adds.
Carr says student debt should be viewed through the lens of the large social and economic contributions that students, graduates and universities in general make to Australia.
“ The fundamental problem is that in the Coalition’ s narrow economic worldview, money spent on education is not an investment,” he says.
Carr says that the review of the demand-driven system could result in a fee hike, as Kemp and Norton are“ strong proponents of fee deregulation”. He is concerned the progress Labor made towards increasing participation in universities for all students, including those from disadvantaged backgrounds, will be undone by a government he says is keen to turn universities into a cash cow.
He adds there are calls from within the Liberal party to lower the student loan repayment threshold.“ This would affect the most marginal of graduates.”
Labor also opposes the Coalition’ s move to transform Student Start-up Scholarships into loans.
The Greens’ approach
Greens spokeswoman for higher education senator Lee Rhiannon says there is a need to reform the payment system for loans.
“ The current system burdens students with debt when they are already facing the stress of finding a job and establishing themselves in the broader community,” Rhiannon says.“ It has been found that students from lower socio-economic backgrounds are more debt adverse, particularly young women.”
As fees increase and the job market flat lines, Rhiannon says the debt burden will increase, adding this particularly affects those entering lower paid jobs.
Average repayment time is expected to rise to 9.1 years for new debt in 2016-17, and to 11.1 years if Student Start-up Scholarships are converted into loans, Rhiannon says.
Rhiannon considers the free education model from the mid’ 70s to 1980s the only fair and sustainable option for resolving any issues with student debt and says any reforms need to be stepping stones to the complete abolition of fees and debt. A reduction in fees and an increase in the repayment threshold are two possibilities she suggests.
“ The main issue with our current system is that it violates two Greens principles on education: education as principally a public good and universal access being fundamental to the wellbeing of our society,” she says.“ There is a lack of political will from Labor and the Coalition to raise revenue for public services such as our universities.”
Before the last election, the Greens set out plans to raise an additional $ 42.7 billion through the alteration of the mining tax, introduction of a public support levy on the four big banks, an increase on the marginal tax rate on incomes more than $ 1 million and abolition of tax breaks for the fossil fuel industry.
12 | campusreview. com. au