Fears High Uni Costs Deter Study

The Age

Wednesday October 26, 2005

JEWEL TOPSFIELD

VICTORIAN students and graduates owe more than $3 billion in outstanding HECS debts, prompting fears that rising fees will deter students from going to university.

New figures from the Australian Taxation Office show the Higher Education Contribution Scheme debt in Victoria jumped by more than $1 billion in the past five years.

Opposition education spokeswoman Jenny Macklin said the figure was certain to rise further following a 25 per cent rise in HECS fees at most universities.

"The prospect of carrying huge HECS debts is discouraging Victorian students, particularly those from low-income families, from going to university," Ms Macklin said.

"We saw this year a serious decline in the number of students applying to go to university. There also is evidence the very high levels of HECS debt are making it harder and harder for people to buy a home and people are delaying starting families."

The deferred HECS loan was introduced by Labor in 1989 and is now repaid gradually once a former student's subsequent income reaches $36,000.

In 1997, the Howard Government divided HECS charges into three bands, with rates based on estimated graduate salaries.

Ms Macklin said the average HECS fee paid by Australian students had doubled under the Howard Government. "The price hikes mean Victorian students are now paying $20,000 for a science degree, $40,000 for a law degree and nearly $15,000 for an arts degree," she said.

The ATO figures show that Victoria has Australia's second highest HECS debt at $3.099 billion last December, behind NSW with a debt of $3.248 billion.

National Union of Students Victorian president Jeremy Kelly said the HECS debt was alarming and would deter some people from pursuing tertiary study.

"When I first started studying three years ago, students didn't really think twice about their HECS debt," Mr Kelly said. "Now I speak to first-year students who have a real concern about how long it is going to take them to pay off their degree before they can start saving for overseas travel or buying their own homes." He said the increased fees would definitely discourage people from going to university.

But Australian Vice Chancellors Committee CEO John Mullarvey said the demand for higher education places still outstripped supply. "The unmet demand this year shows an excess of 20,000 students who wanted to go to university, who were qualified to go to university, but couldn't get a government-funded place," Mr Mullarvey said.

"The HECS levels charged by universities, while certainly higher than our preferred position, are not deterring students from wanting to go to university." A spokesman for Education Minister Brendan Nelson said that in the past five years there had been a 31 per cent increase in students attending Victorian universities.

"It's also worth remembering that for every dollar a student contributes towards the cost of their university education, the Australian taxpayer has provided another three times that," he said.

© 2005 The Age

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