Give And Take For Graduates

Sydney Morning Herald

Wednesday May 14, 2003

Gerard Noonan

University graduates will be able to earn annual salaries of up to $30,000 before becoming liable to start paying back their tuition fee loan to the Federal Government.

Students presently face repayment of their higher education contribution scheme (HECS) debt when their income reaches $24,365.

But the concession comes at a cost.

As foreshadowed by the Herald, the Government has shaken up the way universities charge tuition fees, allowing them to charge as much as 30per cent more for almost all courses from the 2005 academic year.

The exceptions are nursing and teaching two areas targeted as being in the national interest where a maximum charge for annual tuition fees under HECS of $3854 will apply.

The changes mean that individual institutions which feel they have sufficient brand power, such as the long-established ``sandstone" universities in each capital city, will be able to charge as much as $8355 a year for elite courses such as law, dentistry, medicine and veterinary science.

Middle-ranking subjects like accounting, engineering and science will attract fees up to $7137 per year, while students in arts, social studies, languages and humanities subjects will face HECS fees of up to $5010 from 2005.

Universities which have more difficulty attracting students will be able to lower their fees.

Currently, enrolled HECS students have until the end of 2008 to complete their courses under the present arrangements but if they discontinued their enrolment they face the new fees.

The Government has also cut the discount for up-front payment of HECS from 25 per cent to 20 per cent, though students who repay their debt ahead of time will get a 10per cent discount.

From 2005, repayment of HECS debt rise from 6per cent of income to a maximum of 8per cent when a person's income exceeds $64,999.

The Education Minister, Brendan Nelson, will also introduce a new loans scheme for students who pay full fees up front for their courses typically those who have won a place with a university entrance score up to five points lower than their peers. They will be able to borrow up to $50,000 for courses at either public universities or private training institutions.

Students will be required to repay these commercial-style loans at a rate of interest set at 3.5 per cent above the consumer price index.

The principal on a HECS loan, by contrast, is indexed to the CPI but no interest rate is charged.

No Sunday picnic Page 15

© 2003 Sydney Morning Herald

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