Hell's Pels It's The Loan Arranger

Sydney Morning Herald

Thursday April 26, 2001

By Aban Contractor

The Postgraduate Education Loans Scheme (PELS) is under fire.

Earlier this year, to great fanfare, the Federal Government announced billions of dollars for higher education and research.

The package led the TV news and the front pages of newspapers. Prime Minister Howard and no less than three senior ministers stood before the cameras happy to be the bearers of glad tidings. It was a public relations coup.

But the devil was in the detail.

Most of the money was not available until the latter part of the five-year cycle and the guidelines for the much-touted postgraduate student loans were still to be drawn up.

When the Herald asked students and prospective students how they expected to fare on the loan front, the question was greeted with a collective shrug.

Three months later, the Department of Education, Training and Youth Affairs has put in place "parameters" for the Postgraduate Education Loans Scheme (PELS) for fee-paying students. But - and it could be a big but - the scheme still has to be finally approved by Federal Parliament.

If all goes well it will begin on January 1 next year and, according to a two-page department briefing paper:

* All students enrolled in fee-paying non-research courses in public universities can apply

* Students who began their courses before 2002 will be eligible for a loan for fees incurred from 2002

* There will be no cap on the number of students granted a loan

* The loan is for tuition fees only

* Universities will set fee levels

* Fees may be tax deductible if paid directly to the university, but not on repayment of a loan

* Students can pay part of their tuition fee for the semester and get a loan for the balance

* Debts older than 12 months will be indexed by the Consumer Price Index on June 1 each year. The loans are GST-free.

Back in late January the Government said the loans - expected to amount to almost $1 billion over the next five years - would allow more people to upgrade their skills.

But is access to postgraduate education really that simple? Not according to the president of the Council of Australian Postgraduate Associations, John Byron. Some students would benefit, but others would not, he says.

He believes students would have been better off if the Education Minister, David Kemp, had bitten the bullet and regulated the fee structure, reining in the universities that bump up prices for popular courses.

"If the Government were fair dinkum it would reintroduce HECS for postgraduate coursework and not something that is intended to look like it," Byron says.

"The scheme will drive the cost up by increasing demand and the perception of affordability. It's the universities that set the price."

The National Tertiary Education Union believes the scheme is a mixed blessing. Its president, Dr Carolyn Allport, says access to loans which do not attract an interest rate and are payable at the same income threshold (currently $22,346) and rates of repayment as HECS are extremely attractive.

"However, the existence of such a loans scheme entrenches the culture of full-fee paying and sets the scene for the possible deregulation of fees for undergraduate courses," Allport says.

Byron raises another concern - that employers who assist workers with course fees could see the scheme as an excuse to withdraw their financial help.

"The impediment of not having the cash won't be there," Byron says. "So industry diminishes its contribution and shifts the cost still further to the student."

Those applying to study next year might want to keep an eye on the Senate to see what, if any, changes to those "parameters" are imposed.

© 2001 Sydney Morning Herald

Back to News Index | Back to Home