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Education has been placed at the forefront of Labor’s pitch to voters, as the Albanian government prepares for the upcoming elections.
Education Minister Jason Clare has made no secret of his desire to see Australians better themselves.
“Under Bob Hawke and Paul Keating, the number of children completing secondary education increased from around 40 percent to almost 80 percent, and it changed the nation. In the budget we set a new target, one by the middle of this century. 80 per cent of our workforce will not only have been to school and completed their education, but will have also attended TAFE or university. »
But for some students, there are financial considerations related to how those studies are paid for.
Most TAFE or university courses come at a particular cost – and for graduate Rakelli Albino, it’s a matter of deciding whether taking on HECS debt is worth it, if you can’t pay up front.
“It’s a bit like a never-ending cycle: you want to find a job. You want to study for whatever reason: if you just want to expand your knowledge or have job prospects. It still costs a lot more in the long run .You have to ask yourself if it’s worth going to college.”
The HECS system has attracted increasing criticism in recent years, notably in 2023, when indexation – linked to the consumer price index and the inflation rate – jumped by 7 per cent.
Independent MP Monique Ryan said earlier this year that this highlighted the unfairness of the system, in which debt accumulates faster than a person’s ability to repay the balance, because indexation is added before refunds – made through the tax system – are applied to accounts.
“2.9 million Australians have HECS debt. That’s one in ten of us. And these people carry that debt for decades… So if you’re an average Australian finishing school and that you earn $60,000 a year and that you If you have an average HECS debt, your HECS debt increased last year after the repayments you made.”
Bruce Chapman is Emeritus Professor of Economics at the Australian National University and considered the architect of HECS.
He said in May this year that the idea of indexation was reasonable in itself.
“It is right for a government to index the debt. Because the government brought something to the students, which was a university, and it cost the taxpayers money at the time. And with over time, of course, costs increase, so indexing the debt is a way of ensuring that the government returns to what it announced.”
But he maintained that politics is another story.
Under pressure from critics, the government promised to move to indexation, pledging to pass a law to reduce the rate applied last year.
The Greens have, however, pushed for student debt to be eliminated altogether, with senator Mehreen Faruqi saying making students pay to study is fundamentally unfair.
“All student debt should be wiped out and university and TAFE should be free. It’s a start but, if Labor can wipe out 20 per cent of student debt, surely they can wipe it all.”
The government refused to accept the Greens’ position.
But he proposed a second plan: a 20% reduction in HECS debts in 2025, which would wipe out on average just over $5,500 of HECS owed this fiscal year.
And Anthony Albanese revealed there was a third kicker:
“We will increase the reimbursement threshold, from $54,000 to $67,000. We will reduce the reimbursement rate and we will index both to keep them fair in the future. This means that if you earn $70,000, , you’ll save $1,300 per year in repayments.”
Not everyone is happy with these announcements.
Opposition spokesman Simon Birmingham said it was a cynical political ploy.
“It’s not a real reform. It doesn’t change the tuition that someone who starts college next year pays. It’s just a nudge from Anthony Albanese, a attempt to attempt to mislead or mislead an electorate before an election.”
The Greens are also unhappy, as South Australian senator Barbara Pocock says there is nothing stopping the government from seeking parliamentary approval now.
“We say to the Albanian government: let’s do it now. Let’s not postpone this until after the elections. Students need help now. And we, the Greens, are ready to act immediately to make this possible this year.”
But economists say we also need to look at the bigger picture.
Some, like Chris Richardson, argue that changes to the financing of the third sector could worsen inequalities already present within the tax system.
“There’s always someone who pays. It’s basically a tax cut – but only if you went to college. And ultimately, it’s paid for by those who don’t went to college Since some student debt is never paid off anyway, the people who are the least financially successful – that’s a pretty big subsidy from the least well off to the most well off.
Others point to gender inequalities.
This is because women tend to enroll in courses that cost more and ultimately pay less in their future careers – and find their working lives and ability to repay interrupted by caring responsibilities.
Bruce Chapman says the various fees are not reasonable.
“We’ve had differential HECS since 1997, when the Howard government introduced differences. But the differences that have emerged in 2020, I think, are about as unfair as it gets. They’ve been charging humanities students – they’ve doubled fees for humanities students – particularly female graduates – are the lowest paid. They will have the highest debts and some of the most lucrative professions – medical specialties for example –. pay lower annual fees than humanities This is probably the biggest problem with the current HECS system.”
More and more research confirms the impact of higher education between men and women.
Submissions to university consent surveys – and separate academic studies – suggest that the HECS debt burden falls disproportionately on women.
A study published by Mark Warburton of the University of Melbourne’s Center for Graduate Studies says the largest student loan repayments came from registered nurses, followed by primary school teachers.
The Futurity Investment Group’s Impact of University Debt report, meanwhile, found that university-educated women earned less and had more HECS debt than their male counterparts.
Bruce Chapman says he agrees with the recommendations in the recent Universities Accord that HECS repayments should be linked to capacity.
“Do your best to charge students and graduates based on their likely ability to pay. After all, HECS is an income-tested system, so it is determined by ability to pay. So you don’t want to have very high debts for people.
The gendered nature of HECS policy has received little attention in the general public debate.
But Rakelli believes that if the government considers further changes, it should take into account that people don’t always pay off their education early.
“You’re 18, 21, 22, you graduate from college. You have $16-20,000. It doesn’t really affect you until later. For example, if you’re 30 and ready to look for a mortgage , you’re a step back from something from so many years ago And you don’t have a lot of control over that, over how you get your money back, and where your money goes.
