In
1974 the Whitlam Labor Government gave the Commonwealth full
control over higher education funding and made a university education
free for those who met the educational entrance requirements of
tertiary institutions.
In
1976 the Fraser Coalition Government tried to re-introduced
tuition fees for post-graduate and second degrees as well as for
tuition fees for foreign students – with limited success.
However
by 1983 the international and national economic climate began to test
the resolve of the incoming Hawke Labor Government and in the
August 1988 Budget it announced that it would introduce university
tuition fees via the Higher Education Funding Act 1988
(HECS).
The
scheme was to have only one rate of contribution ($1,800 in 1989) and an
up-front payment discount of 15 per cent on tuition fees. Repayment
of the HECS debt was to begin once the university graduate began to
earn a wage over the compulsory repayment threshold and, any unpaid
HECS debts would be discharged on the death of the graduate.
In
the following years the Hawke and Keating Labor Governments
tinkered with repayment schedules and introduced new schemes based
on HECS repayment arrangements for specific groups of students.
However
it was during the years of the Howard Coalition Government
that the floodgates were fully opened allowing the ‘user pays’
rationale to begin flooding across higher education. The debt
repayment threshold kicked in at a lower annual income and
universities were given greater licence to use ‘market forces’ as
a tool in setting course fees, amongst other measures.
This
increased emphasis on ‘user pays’ tertiary education did not
cease during the years of the subsequent Rudd & Gillard Labor
Governments and the Abbott, Turnbull and
Morrison Coalition Governments – with Abbott’s
deregulation of university fees combined with his cuts to the level
of government funding of universities being significant.
So
although by 2020 there were 1,057,777 domestic students studying at
Australia’s 39 comprehensive universities,
just 60% of first-year domestic students enrolled in undergraduate
courses were aged 20 or younger, the lowest proportion since 2005
[Universities Australia, 2022 Higher Education Facts and Figures,
June 2022]. Additionally, by 2021 the attrition rate showed that est.
24.2% of all enrolled university students did not complete their
degree, with some indication that slightly more male students than
female students might be failing to complete [Dept. of Education,
Higher Education Statistics, October 2022]. By 2022 only 32%
of the Australian population aged between 15-74 years of age held a
bachelor degree of higher [ABS, Education and Work, Australia,
May 2022].
One
has to wonder what the future chilling effect on higher education
choices by school leavers and mature aged students might be with the
changes
to student loan debt indexation announced by the Albanese
Labor Government in May 2023.
National
Tertiary Education Union, media
release, 1 June 2023:
New
report reveals some degrees could take up to 44 years to repay
A
new report released by the National Tertiary Education Union (NTEU)
has revealed repayment periods for some university degrees may extend
up to 44 years, raising serious concerns about the accessibility and
affordability of higher education in Australia.
The
report, titled "The Future of Graduate Debt in Australia,"
reveals that under current policy settings, repayment periods for
certain degrees could exceed 40 years.
Many
four-year degrees could end up costing more than $100,000 once debts
are repaid.
The
study indicates that graduates from a Business Management degree are
likely to be the worst affected, with a staggering repayment period
of 44 years, totalling $119,331.
The
modelling shows a Humanities and Social Sciences Honours degree could
take 40 years to repay at a cost of $110,353.
Female
law graduates could take 36 years to pay off their qualification,
four years more than their male counterparts.
The
report's release comes a day ahead of repayments on the Higher
Education Loans Program (HELP) debts – also known as HECS - rising
7.1 per cent when they are indexed on Thursday.
Current
total outstanding HELP debt stands at $74.3 billion for the financial
year ending 2022, around four times as much as 2009.
The
average amount of student debt is now $24,770 per student, up from
$15,191 in 2012. Students now take an average of 9.5 years to pay off
their degree, compared to 7.3 years in 2006.
The
report, compiled using data from across the sector, shows a
combination of newly increased course fees under the Jobs Ready
Graduates Reforms, reduced repayment income thresholds, and high debt
indexation are to blame for the spiralling repayment crisis.
NTEU
National President Dr Alison Barnes said the findings were a serious
concern.
"This
report paints a startling picture of the current state of tertiary
education. We are seeing students who may be paying off their debts
for the majority of their working lives," Dr Barnes said.
"This
is not what higher education should look like. It's a barrier to
equality which must be a core principle of our universities."
"We
are seeing the toxic legacy of the radioactive half life of the
Coalition's Jobs Ready Graduates model.
"But
despite that serious damage, we are hopeful the current federal
government is serious about tackling these issues to create better
universities for students and staff.
"Education
is a fundamental right and should not lead to decades of financial
burden. We need to address this issue.
"We
will continue to engage positively with the government to ensure
students aren't saddled with lifelong debt into the future."
Assumptions
in the report:
*
Wage growth: 2.3% – the average of the last 10 years
*
Indexation rate: begins at 7.07% then falls to 2.2% over the next 7
years – 2.2% is the average indexation applied over the last 19
years
*
Starting salaries are those for the industry linked to each program
*
In the model repayment thresholds are indexed at the same rate as
student debt
