Thinktank recommends changes to Australian student fees

Tuesday, February 28, 2006 

The Centre for Independent Studies has released a paper calling for reform of university student fees system. The paper, authored by Andrew Norton, argues that the cap on loans to full fee paying students is too low. The current cap allows for loans during a lifetime of AU$50,950.

"Setting the FEE-HELP limit at this amount biases the market against courses that are long or have high per year costs, or both," argues Norton in the paper. "The loan cap is a crude way of controlling lending, taking no account of course costs or capacity to repay."

According to Norton, this undermines student choice and competition. He argues that the system should function more like commercial lending.

"A truly radical reform would make student loans mimic commercial loans: students with good earning prospects could borrow large sums, other students could borrow less, and some could not borrow at all," he said. "Instead of denying or limiting loans to people doing high cost courses, as now occurs, the government could deny loans to people who are unlikely to repay."

The paper was criticised by Senator Kerry Nettle, Education Spokesperson for the Australian Greens. She argued that the changes would mean an increase in costs to students already struggling to pay, and called on Education Minister Julie Bishop to rule out the changes.

"To consider refusing loans to those deemed less able to repay would further cut off higher education for Australians from low socio-economic backgrounds," she said. "Julie Bishop should use her address to the National Press Club tomorrow to rule out any moves to further deregulate the HECS system."

"Student fees have spiralled upward under the Howard government and any further deregulation would just make a bad system worse," she added.

Australian student fees system

The Australian government has a system of subsidising student tuition fees. This system has undergone many changes during the Howard government. There are currently three strands:

• HECS-HELP for students receiving federal government tuition subsidies
• FEE-HELP for full-fee students
• OS-HELP for study overseas

The Centre for Independent Studies

On its website, The Centre for Independent Studies describes itself as "the leading independent public policy 'think tank' within Australasia. The CIS is actively engaged in support of a free enterprise economy and a free society under limited government where individuals can prosper and fully develop their talents. By critical recommendations to public policy and encouraging debate amongst leading academics, politicians and journalists, the CIS aims to build a better society." It claims to be funded by "private sector donations-from individuals, companies and charitable trusts-as well as subscriptions and books sales."

In a press release the Greens described the think-tank as "rightwing".

Sources

• Media Release. "Greens call on Bishop to rule out HECS and FEE-HELP changes" — Australian Greens, February 27, 2006
• Media Release. "HELPless: How the FEE HELP loans system lets students down and how to fix it" — The Centre for Independent Studies, February 27, 2006
• "About CIS" — The Centre for Independent Studies, February 27, 2006