VET & TAFE campusreview. com. au
A new report floats some ideas for extending HECS-type assistance to VET students; just how the government would go about that is still unclear.
By James Wells
Loans for all
Income-contingent loans should be rolled out to VET students, a Mitchell Institute fellow suggests, following a new report modelling the potential costs. Professors Bruce Chapman, key architect of HECS, and Timothy Higgins, senior lecturer in actuarial studies at the Australian National University, modelled the financial costs of applying a loan scheme for all Australian tertiary education students in Feasibility and Design of a Tertiary Educational Entitlement in Australia, which the Mitchell Institute commissioned.
Peter Noonan, Mitchell Institute fellow and expert in tertiary education policy, says the report is designed to model changes that would make the Australian tertiary education funding system more equitable.
“ One of the gaps in the current tertiary funding system is that students in certificate-level programs can’ t get access to an income-contingent loan but are now facing fees of up $ 3000 to $ 4000, and even more, up front,” Noonan says.“ They can get a loan if they are doing a diploma, of course, or a university degree. It’ s fundamentally inequitable.”
Noonan clarifies the report did not model actual costs, but rather made predictions on how much the government would invest in student subsidies if an extension of the HELP loan system occurred. Furthermore, despite claims to the contrary, he also says extending assistance would not cause a hike in higher education fees.
“ It is true that graduates would begin to pay at a slightly lower salary than they do at present, but they’ d be paying only a small amount,” Noonan says.“ For most students, it would mean they wouldn’ t pay any more. In fact, they might pay less because it means they’ ll be paying it off more quickly, which means they can then begin to save and use income for other things.”
Chapman says that while his report puts forward the case for extending fee assistance, it does not advocate for any particular model of extension, but rather provides policymakers possible options if they do decide to extend the HELP loan system. Furthermore, he maintains if VET students cannot pay back their loans due to being confined in a low income bracket, it would not be a significant drain on the public purse.
“ In the report, Tim Higgins and I modelled different ways of doing it, to make sure the taxpayer costs weren’ t too high for uncollected debt,” Chapman says.“ If they are low income earners all their lives – like, very low income earners – there’ s no problem because they wouldn’ t pay back at all.”
Dr Craig Fowler, managing director of the National Centre for Vocational Education Research, says successfully extending HELP loans to Certificate III and IV would be complex, as the demographics of VET students are different to those for university students. For example, Fowler says that unlike university students about a quarter of the VET cohort is over 40, meaning they have less earning potential to pay back their loan.
He also says two-thirds of students seeking a Certificate III or above are studying while employed part- or full-time, and thus studying part-time. The dropout rate for VET students is also much
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