Grattan report: Graduates should repay loans sooner

Grattan report says changes to HELP repayments would save $500 million.

The findings of a Grattan Institute report reveal that many Australian graduates are either taking too long or failing entirely to pay back student loans.

Australia’s higher education system has been labelled “unscrupulous” by the report for granting loans for vocational and education training to Australians who will be unable to repay them.

Higher Education Program Director at the Grattan Institute, Andrew Norton, said that while the Higher Education Loan Program (HELP) is a “vital government program”, the problem is that “too many borrowers either do not repay what they owe or take too long to clear their debts”.

Since the introduction of HELP in 2009 an increasing number of people undertaking study in Australia are accepting financial assistance from the government to finance their education.

According to the report, “The number of students borrowing [for vocational education and training] has increased dramatically, from 5,300 in its first year to 203,000 in 2014. The scale of growth is due partly to unscrupulous vocational education providers enrolling large numbers of students with limited earnings prospects.”

“Most will never complete their qualification, triggering high rates of bad debt. Rapidly escalating average tuition fees have compounded the financial problems caused by enrolment growth”, the report said.

In 2014-15 Australian graduates were $7.8 billion in debt for their studies. Of that amount, it is estimated that $1.6 billion, or 20 per cent, will never be paid off. This is because many students will either not complete their studies or never achieve the earning threshold required to begin repayments.

Currently, graduates are required to begin making repayments when they start to earn $54,126. However, the report found that fewer than 30 per cent of part-time workers with bachelor degrees and 14 per cent of part-time workers with diplomas will earn enough to reach the repayment threshold.

To rectify the situation, the report suggests that, if the threshold at which graduates began repaying their debt was lowered to $42,000, nearly 50 per cent of those owing would be able to begin making repayments. It is estimated that this change would save the Budget at least $500 million per year.

Read more at grattan.edu.au.

Read more at theguardian.com.au.

Opinion: It’s already a struggle out there

The days of the Australian Government completely subsidising higher education are long gone. Yet, for many Australian students, the HELP loan still represents an invaluable chance to skill-up and become educated. 

Lowering the threshold at which graduates should begin repaying their loans might save a few hundred million in the budget but the cost to young workers who are just starting out in their professions will be astronomical. It’s a volatile time to be living on a low income, especially in Australia’s largest cities, where so many people more to study and work.

Graduates are struggling out there. The ability of graduates to pay rent (let alone buy a house), buy food and actually have enough to enjoy themselves hinges on maintaining a careful balance of study and work, and gaining skills and experience that can lead to a job. Imagine the added pressure that lowering the Help repayment threshold will have on graduates.

According to the report, people most affected by the threshold change would be women (who are more likely to work part-time), diploma holders (who are more likely to earn less than the current threshold) and students who fail to complete their studies altogether. In 2014, 60 per cent of all domestic students completing degrees were women, and women made up almost two-thirds of borrowers.  

Sure, $500 million extra in the Budget looks good. It could be put to use somewhere important – for example, back into the education system or to hospitals or into the welfare system. But we can all see what’s happening here: the mentality of robbing Peter to pay Paul is ongoing. Year-after-year Australians who are already struggling (pensioners, students, single-income families) are being asked to sacrifice more while those who could afford to pare it back a bit (politicians, multinational organisations, etc.) continue to duck their heads so they won’t be called on by the teacher.

I don’t know what the answer is, but it’s obvious to me that the stakes are already high enough for young graduates. The extra pressure of scraping together loan repayments before really having the means to do so is a terrible way to start off in life.

What do you think? Do you agree that the threshold be lowered to $42,000 as the Grattan report recommended? Can you think of better ways for the government to retain the budget? Are student loans being doled out too frequently by Australia’s educational institutions? 





    COMMENTS

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    ex PS
    30th Mar 2016
    10:54am
    Here's a noval idea, it might just be too far out their for the government to consider but here goes.
    How about the LNP going after their polititical backers and make them pay there fair share of taxes, or maybe just as a start tell them that if they make a profit in this country they will be expected to have an office in this country where all profits will be directed to so that the correct amount of tax can be collected.
    If the government spent half the amount of time it spends pursueing the battlers of this country on going after large multinationals otherwise known as LNP contributers we would be well on the road to recovery.
    I would not expect that they give up their vendetta against retirees and students, but they could at least devote a little bit of time to the more well off.
    Richied
    30th Mar 2016
    11:14am
    There are two ways to address a problem: Tackle the effect, or tackle the cause.

    The article describes the budget problem having the effect that 20% of student debt won't be paid off. It also describes two causes: Students don't complete their courses (primarily because they shouldn't have done the courses in the first place), or they don't reach the salary threshold.

    I suggest that the government should be looking at the reasons why those causes are happening, and attack those.

    There are a huge number of unscrupulous education operators out there, who chase 'students' so they can get government payments. Almost every week we hear of either operators going bust (after stripping all money from the business) or of operators who have extremely low success rates (is having 10-20% of enrollments complete a course acceptable?). Changing the government subsidies to align with a metric of success, rather than enrollment, will reduce this unscrupulous behaviour. In other words, the operator needs to screen their potential students more rigorously to ensure they have the ability and the aptitude for success.

    Secondly, perhaps the threshold (or repayment schedule) needs to align with the earning capacity of the chosen career. One outcome might be that the cost of courses more closely align with earning capacity, although I can see challenges in getting a workable solution (lowering thresholds adversely affect lower income earners; increasing payment schedules for high income earners could be a disincentive).

    In any case, a blanket lowering of thresholds is a broad brush reaction that does nothing to address the causes of the problem.
    ray @ Bondi
    30th Mar 2016
    1:16pm
    could there be a lack of jobs, in that nearly everything that can is being sent oversea.
    Richied
    30th Mar 2016
    1:39pm
    Yes Ray, I agree somewhat. The types of jobs people train for are not necessarily the jobs that are available by the time they finish their training, because they've been offshored. All jobs that can be done remotely are being moved overseas, and a lot of other jobs are being commoditised so don't rely on highly trained graduates.

    Perhaps this too is a failure of governments - if the strategy is to join the global community (through globalisation, reciprocal visa arrangements, free trade agreements) surely the strategy should also include how to train citizens for the future jobs. We seem to be training people for jobs that will be redundant.
    ex PS
    30th Mar 2016
    5:53pm
    Unfortunatley education is on a fou year schedual, governments don't seem to be able to plan past the next election date.
    Tante Chrissie
    30th Mar 2016
    11:41am
    Another novel idea. My son worked while he did his degree and accumulated a certain amount of money in a superannuation fund. He also accumulated a HECS debt. Before he earned enough to pay anything off his HECS but still accumulating superannuation, he went overseas. Up to now, and for the foreseeable future he remains overseas. Meantime his HECS debt goes up and his superannuation (now frozen) has greatly diminished. (Difficult to know what all the fees on his superannuation were for considering absolutely nothing happened except taking those same fees.) Anyway, had he been allowed to withdraw his superannuation to pay his HECS the government could have put that money back into the pool and he would also have been better off. The only loser would have been the superannuation fund. I have put this question to various politicians who say the superannuation is important for his old age and cannot be used in this way. Unfortunately it has virtually disappeared so that is not a good argument. If a graduate remains in Australia the same thing applies to some extent because any amount paid off HECS is to everyone's benefit and there is still the prospect of a long working life in which to establish superannuation.
    andromeda143
    30th Mar 2016
    11:55am
    Here is a better suggestion that may "kill two birds with one stone".
    How about if companies are offered tax breaks to subsidise scholarships for students. The larger organisations can start to live within the tax system legitimately and still get some allowance for their philanthropy. The government can save some money on HELP loans and on trying to get the loans repaid. The students can receive loans from companies which need only be repaid in part or in kind. They could pledge to give their benefactors first refusal of their employment services on graduation.
    Everyone would be better off and education would be encouraged.
    Chris B T
    30th Mar 2016
    11:58am
    All enrollments should have a non refundable deposit of 25% of fees for choosen course.
    On completion of course a tiered repayment no matter how low the earnings are.
    Pay back all fees before starting another HECS base course.
    At least this will make those who wont higher level of education take more responsibility for their actions/avoidance of repaying debt.
    ;-(0)
    ray @ Bondi
    30th Mar 2016
    1:18pm
    and just who can afford that is a person does not have wealthy parents, education for the rich and the rest can go away beg somewhere.
    Chris B T
    30th Mar 2016
    2:30pm
    So we all have to pay Higher Education For All Who WANT IT and regardless of Their Situation.Poor people can access loans.
    Pilots have to earn flying time/hrs without HECS type loans.
    I would like to do Marine Biology and Remain under full education.
    Gain a university eduction then work overseas, without paying HECS back.
    These Higher Level of Education HECS LOAN's should come with a higher level of Gratitude for the use of PUBLIC MONEY.
    I would have liked The PUBLIC To PICKUP ANY BAD DEBTS I MADE.
    I'm Poor can't afford BONDI To LIVE.
    Happy cyclist
    30th Mar 2016
    3:06pm
    So Chris, you are suggesting that Ray is rich because he lives in Bondi. He may be, but then it shows he is fair minded because he is concerned for the poor people! So you should not yell (YELL) at him.
    Also, I question your comment that poor people can access loans. What would they use for collateral? If studying presumably they don't have a fulltime job. I'm not sure you are thinking your answers through!
    Anonymous
    30th Mar 2016
    4:43pm
    For those students that drop out I agree they should pay off their HECS debts before being allowed back on the gravy train.
    Chris B T
    31st Mar 2016
    9:55am
    Happy cyclist
    We all want a free ride without the responsibility of your actions.
    Free educcation is not a continual gift at some stage the loan needs to be repaid, not forgiven.
    So I say again the Public Money, should then take All Bad Debts and forgive those who can't pay their Debts.
    HECS is for higher education, not cost of living while doing the course, when the course is over to be Repaid so there is no Repayment while or during the course.
    Failing to complete a course should have to be paid within a Set Time Frame.
    Exiting the country without paying the debt should forfeit there fare/cost of transport, you can't pay your debts how can you afford to travel overseas.
    This HECS loan Is a Gift out Public Money.
    The Poor who have no Collateral have Debts, Bad Debts.
    When Public Money Is Used it has to have a greater Responsibility and with the knowledge that if you take this HECS loan it needs to be repaid so some other would be student can use it for there education.

    So these users of the HECS Loan system are who don't pay back there loans are staving the funds for future use.
    A Debt is a Debt.
    Brissiegirl
    30th Mar 2016
    12:04pm
    The incentives for those who want to look after themselves for life, achieve success and prosperity, are being eroded. For the majority doing a 4-year tertiary course, they drive around in old bombs, get around with the bum out of their jeans, go without small luxuries, pay for their books, and when all that's done come out of university with a massive debt around their necks. The reward for all their hard work and sacrifice is arriving into the working world at a time when they would love to get a decent car, perhaps get married, buy a house, have kids. Recent successive governments have determined that, like retirees, university graduates who went without with an eye to the future should be punished for their sacrifices and aspirations.
    KSS
    30th Mar 2016
    12:52pm
    Brissiegirl, students have always " drive around in old bombs, get around with the bum out of their jeans, go without small luxuries, pay for their books" as students. That's is and was the nature of the beast.

    There are plenty of people who did not go to further education who would also love to "get a decent car, perhaps get married, buy a house, have kids" too. These are not just the desires of the educated. They are 'everyman's' desires. Sometimes you just have to accept that you can't have everything and you can't always have it when you want it either. Choices have to be made and personal responsibility taken.

    Frankly I am getting just a little tired of people in ALL age groups thinking they are a 'special case' and should be 100% supported by the government of the day. Australia quite simply cannot afford it. People must take responsibility for themselves and stop expecting handouts at every stage.
    ray @ Bondi
    30th Mar 2016
    1:21pm
    and I ask why cant we afford it, it would not be because the goverment sold all the public's assets that generated an income to their rich mates, who do you think holds most of the shares.
    how many billions years from the commonwealth ban, telstra, and the airports just to mention a few.
    KSS
    30th Mar 2016
    1:40pm
    And people with superannuation funds benefit from that 'sell-off' since they are now invested in all those assets though shares.

    Now if you were complaining about the sell off of prime agricultural land, water rights and the biggest dairy farm in Tasmania to the Chinese (and others), I may have more sympathy for your argument, ray from Bondi.

    30th Mar 2016
    12:18pm
    Countries with FREE education do not have any problems. Our politicians need to go back to school and relearn their maths.
    KSS
    30th Mar 2016
    12:45pm
    There is no such thing as free education in Australia at ant level. If people continue formal education after high school then they should be fully aware they are incurring a debt. And like all debts it will need to be repaid. If people choose to spend their money on holidays overseas, the latest and greatest smartphone, meals out, down the pubs and clubs, that's up to them. But they shouldn't then moan about having a continuing debt. Nor should their parents.

    Taking off overseas for work is also no excuse to avoid paying the debt. If anything they should be paying it back quicker. try skipping off with an outstanding car loan and see what happens.

    An almost $8b debt to the nation is simply ludicrous. The sooner people take responsibility for their actions and yes their debts, the better off we will all be.
    Tante Chrissie
    30th Mar 2016
    12:58pm
    Of course "skipping off overseas" does not cancel out the debt, but until such a time as that it is possible to make payments it would be sensible for students to be paying their HECS rather than having paltry amounts towards superannuation which in some cases almost disappear, to nobody's benefit.
    Richied
    30th Mar 2016
    1:44pm
    Tante, I know a lot of people who have moved overseas after incurring HECS debts, and they have little or no intention of returning to Australia. There are far greater job prospects overseas. As a result, yes they still have a HECS debt, but most probably will never pay it back (and with the current rules, even when they die and even if they have accumulated a lot of assets, their HECS debt is extinguished).
    Anonymous
    30th Mar 2016
    4:40pm
    It amazes me how many students with looming HECS debts manage to wiz off on holidays to Bali or Thailand at the drop of a hat!.
    FM
    30th Mar 2016
    12:55pm
    Of course the Grattan Institute is at the forefront of a recommendation like this. It has worked zealously over the past three years advocating that retirees and students be targeted for cuts to their income, increases to their taxes and other revenue raising so that companies and high income earners could have a tax cut. How much money does the Grattan Institute receive for its advocacy for right wing business groups and Government razor gangs? Instead of making a contribution to society John Daley and other leaders of ‘think tanks’ act like parasites deriving substantial incomes by preying on the most vulnerable. This is a poor return to society for a Tertiary his Education and HECS loan.
    ray @ Bondi
    30th Mar 2016
    1:22pm
    here here
    KSS
    30th Mar 2016
    1:36pm
    On the question of Institute funding.....

    "Grattan began [in 2008]with a $15 million endowment from each of the Federal and Victorian Governments. BHP Billiton provided $4 million. In order to safeguard our independence, Grattan Institute’s board controls the endowment. The funds are invested and Grattan uses the income to pursue its activities."

    And it may be an inconvenient truth but when the Grattan Institute was funded by the Victorian Government AND the Federal Government both Labor run who each kicked the can for $15m. I would hardly call that an advocate for 'right wing' business groups.

    And by the way that $34m was invested and the Institute uses the interest to fund its activities. The capital is still invested.
    Rae
    30th Mar 2016
    4:21pm
    I wonder if anyone in the Grattan Institute has an inkling of life in the real world?

    Student debt is the next big crisis I suspect as the cowboys have it securitised within an inch of a global meltdown event.

    When students can no longer afford tertiary education we will wake up to a third world nation created out of the minds of think tank nutters and right wing ideologists unable to see consequences.
    FM
    30th Mar 2016
    1:07pm
    Apologies for editing mistake in the above post
    Of course the Grattan Institute is at the forefront of a recommendation like this. It has worked zealously over the past three years advocating that retirees and students be targeted for cuts to their income, increases to their taxes and other revenue raising so that companies and high income earners can have a tax cut. How much money does the Grattan Institute receive for its advocacy for right wing business groups and Government razor gangs? Instead of making a contribution to society John Daley and other leaders of ‘think tanks’ act like parasites deriving substantial incomes from preying on the most vulnerable. This is a poor return to society for their Tertiary Education and HECS loans.
    ray @ Bondi
    30th Mar 2016
    1:22pm
    and here here again :)
    Richied
    30th Mar 2016
    1:31pm
    You might have been right before the edit :-)
    The Bernster
    30th Mar 2016
    1:31pm
    Pretty rich coming from a bunch of pollies (both sides of Govt) that got their university education at a time when it was free.
    Both my daughters went/still going to uni and I see the struggle they go through just to get a job and maintain a reasonable lifestyle. I also see the struggles of their friends that went to uni.
    Seriously can these fuckers go after the big end of town tax evaders rather than Mr and Mrs Joe Average all the time.
    Anonymous
    30th Mar 2016
    6:15pm
    hope you daughters and their friends are able to express themselves in a more civil language.
    particolor
    30th Mar 2016
    8:53pm
    Oh Dear ! :-) :-)
    FM
    30th Mar 2016
    2:45pm
    If the agendas the Grattan Institute has been promoting over the past three years are Labor agendas they are very right wing and people should indeed be very afraid of a Labor Government. However they aligned quite closely with the agendas of the Abbott Government and this latest piece on collecting HECS at lower thresholds appears to have the endorsement of the present Government. Last year John ‘leaking tax’ Daley was rabidly advocating taxing super capital draw downs that have already been taxed under old super schemes and removing tax concessions that are in place to assist low income self funded retirees who get these instead of the pension they are entitled to. Some of this happened in the last budget.
    He claims that because retirees have more assets than those commencing work because they have homes and lump sum superannuation they should be taxed on those assets, their retirement incomes cut and the family home taken into account for the pension etc. He completely ignores the fact that the greatest asset and security one has is one’s ability to work and earn an income into the foreseeable future. That is something retirees no longer have. Many self funded retirees cannot see their savings lasting their lifetimes.
    The last piece I saw consisted of the ususal questionable ‘research’ that stated with indignation that retirees were growing assets in retirement instead of running those assets down to a state of indigence. Go back and read his stuff. He was so extreme on Meet the Press that he was reprimanded by Judith Sloan. I presume the Grattan Institute accepts assignments from whoever is in power and from business unless the views being aired are the personal views of John Daley. They are most certainly extremely right wing since he took over.
    MITZY
    30th Mar 2016
    3:32pm
    I don't think John Daley took over. He is obviously a spokesperson but the Grattan Institute is supposedly neither right or left wing.
    Some time ago we all had a discussion on the make-up of the Grattan Institute and KSS above repeated what I said at the time.
    So as I quoted from their website before: "The Gratton Institute is an independent body governed by a Board of Directors that provides strategic direction. Directors are appointed by a council of members whose advice is sought but who do not otherwise influence the direction or publications of the Institute. Gratton Institute directors come from leaders in business, academia, government and the law."

    An as stated before: the members of the board are:......

    Mr Alex Chernov AC QC Chairman, prev. Governor of Victoria 2011 to 2015.
    Professor Glyn Davis AC, Vice Chancellor University of Melbourne
    Ms Geraldine Doogue, Journalist & Broadcaster
    Mr Chris Eccles, Secretary, Department of Premier & Cabinet (Vic)
    Professor John Funder AO
    The Hon. Dr. David Kemp
    Mr Andrew Mackenzie (BHP Billiton)
    Mr.Peter Scanlon, Taverners Group & the Scanlon Foundation
    Mrs Lucy Turnbull AO, Chaor Biomed Ltd & Deputy Chair Council of Australian Governments' City Expert Advisory Panel
    Dr Ian Watt, previous Secretary Department of Prime Minister and Cabinet.

    There's plenty to read on the Grattan Institute's website for all who are interested.
    Rae
    30th Mar 2016
    4:27pm
    Pity there isn't one member not of the wealthy Elite.

    30th Mar 2016
    3:18pm
    Make foreign students pay more for education to make up for the shortfall.
    Richied
    30th Mar 2016
    3:31pm
    They already do.

    Also, if the price of education for foreign students goes up much higher (they already pay full price), Australian education sector won't be competitive. Given that education is now a $20billion revenue stream from international students (up 13% in 2015), killing the golden goose may not be the answer.
    Anonymous
    30th Mar 2016
    4:33pm
    Thank you, Richied. So the government can't get any more blood out of that stone! Mal(evolvent) will have to become EVEN MORE innovative, pull a rabbit or an Abbott out of the hat maybe.
    Not Senile Yet!
    30th Mar 2016
    3:40pm
    All this talk butno figures about repayments.....duummmbbb
    If you are talking about a minimum of $20pw okay with lowering threshold.....but it should be something if employed!
    Nothing isjust a free ride!
    As for overseas workers....while debt exists....they should have to report their income to Oz Taxation Dept and make repayments.....itis a loan...not a free ride!
    Not reorting....not making repayments....should come with penalties.....like Visa Suspension...or emloyer contacts requesting action!
    This is a pointess discussion without real figures.
    AFFORDABILITY.....is a real issue....people need to be rewarded for their hard work.....not penalised unecessarily
    Perhaps discounts on interest if repayments are continuously paid......not so Black & White is it????
    MITZY
    30th Mar 2016
    3:53pm
    The problem is that everybody today expects something for nothing or expects the taxpayer to pay for whatever they want to achieve in life. If one doesn't go to university but takes up some other occupation not requiring attendance at university, they have to pay their way.
    The problem with the university students today is they are not re-paying their debt, in part due to the lifestyle they lead while studying. Many do not live at home these days and that leads to cost of living expenses.
    Now when it comes to finishing their studies so many of them head off overseas and some don't come back and the taxpayer has funded them. Maybe they should be paying a small portion of what they earn from employment whilst studying? At least the taxpayer/government would be getting something back. Most people employed by a firm or small business or the like PAYE all their lifetime of employment. Overseas students pay for their studies here. Why don't ours? When students leave university with their degrees they are practically at an age where after a couple of years of work they are ready to get married and have families so delaying the re-payment for such long periods is not ideal.
    Its an ungrateful society we live in made all the more so by the people at the very top of the chain (i.e. the governments) who sponge from the taxpayer with their perks and big business that manages to pay little or no taxation. God help Australia if the taxpayer went on strike.
    FM
    30th Mar 2016
    4:49pm
    Thank you for the run down on the Grattan Institute. I am not sure that the Board of Directors determines what the Grattan Institute focuses on but it may be worthwhile contacting individual memebers about the nature of their recent campaigns. John Daley replaced a previous CEO and the focus of their reports has changed radically since. They do work they are commissioned to do and they have almost exclusively focused on ways of placing the burden of 'budget repair' on seniors. They may profess to be objective, who wouldn't, but aggressively targeting a vulnerable group in society to point out their wealth and advocate that it be taken off them in one way or another is generally defined as Fascism. With regard to what the taxpayer covers, it seems we now have a Government that wants our society to collectively combine to cover little or nothing other than politicians salaries and 'entitlements'.
    LiveItUp
    30th Mar 2016
    5:01pm
    What about older graduates that do courses knowing they will never earn enough to pay anything back to the government? These debts need to be raised as a debt against their estate and paid back to the government before their estate is distributed.
    Richied
    30th Mar 2016
    6:28pm
    Yep. I'm comfortable with HECS being treated as a debt within an estate. That is, like credit card debt or mortgages, HECS should be able to draw down from any assets remaining in an estate after someone dies.
    Lecheman
    30th Mar 2016
    6:35pm
    It's more disturbing how much it costs to die, yet alone then looking at dispersing whatever funds there are remaining to HECS debts.

    I am one of those 'older graduates' Bonny, and currently unemployed. I am also a Stream 1 category so cannot gain any access to on-the-job training, or other subsidised courses to learn another job role outside of my work history.

    Hence, why I undertook the HECS debt to do a diploma with the hopeful expectation I will be able to start a business. Let's face it, employers steer clear of someone in my age group (regardless of any silly government initiative for mature age workers). So, hopefully, I will be to generate an income to then pay my loan, which I will repay regardless whether I pass the threshold or not.

    It is a matter of principle.
    LiveItUp
    30th Mar 2016
    6:54pm
    I know a fellow now in his 60s who does degree after degree at university as he is bored. I asked him one day what was it costing him and he said nothing as I'm now retired and will never earn enough to pay any of it back. It got me wondering how many others were doing the same?

    RTOs have also been caught recruiting old people to sign up for their courses for government payments knowing these people will never have to pay that debt back.

    Education should be used not abused.
    Lecheman
    31st Mar 2016
    1:35am
    Actually, Bonny, it mentions on the APH.gov site there is a lifetime limit on VET-fee help so this would negate your remarks with that old guy. And considering the amount of money involved and time to do each degree, I would challenge your comment of 'degree after degree'. Sounds good though hey!

    The RTO's doing 'naughties' are being weeded out as the government performs their compliance regs on them. I know personally, as my course has undergone similar changes.

    I have an 'old' friend, on a pension, paying for his VET-fee assistance too. Surprisingly, with all the knowledge he is acquiring, he can still only obtain small contract jobs. Go figure!
    Anonymous
    4th Apr 2016
    11:26am
    So, Bonny, the privileged who can go to university when they are young should do so with government help, but the underprivileged who don't get the opportunity until they are older should have to pay from their estate if they don't live long enough and earn well enough to repay? We can take a risk that the privileged won't ever repay, but not that the older under-priviledged might not?

    I have noticed your views are generally elitist.
    particolor
    4th Apr 2016
    12:22pm
    OOO ! Topping What ? :-)
    FM
    30th Mar 2016
    5:05pm
    Mitzy you live in a rarefied world if you think undergraduate students can afford to pay rent and university fees on part time work. You are advocating a system of tertiary education that could only be afforded by the children of wealthy parents who are not estranged from their families. You have parents deciding what they should study. Overseas students who study here have their fees paid by their families.
    We got away from confining tertiary education to the privileged years ago but I am sure there are many families that would be happy to bring it back. It would reduce the competition for university places and make it easier for their children to get into 'prestige courses' such as medicine, law and dentistry. The fact that so many students go to university and postpone having good cars and starting families shows how important it is to them. We certainly could have a greater on the job training component in many degrees. At one time there were pathways into law, accounting and nursing to name but a few careers via a combination of paid on the job training and university modules with leave given for study.
    FM
    30th Mar 2016
    7:14pm
    So $15 million of taxpayers money was spent to fund the Grattan Institute and it now provides a nice little earner for several very wealthy directors. They do not have to worry about their retirement income.
    KSS
    30th Mar 2016
    7:20pm
    No FM it was $30 million, $15m from the Victorian Labor Government and $15m from the Labor Federal Government. Then BHP chipped in $4m. So $30m taxpayers money.
    FM
    30th Mar 2016
    7:14pm
    In the past 35 years we have increased the amount or Post Secondary/Tertiary Education required for almost every occupation. We have removed any training on the job for a lot of occupations and relegated training exclusively to Tertiary institutions. Examples include training for bankers, police, nurses, paramedics, accountants, architects and lawyers. As usual the governments that presided over these changes did not budget for the cost. As we know we learn a great deal about aspects of our work on the job that cannot be taught theoretically. Perhaps there is scope for reintroducing supervised paid work to qualify for modules or training reducing the amount and cost of what is provided by institutions.
    KSS
    30th Mar 2016
    7:32pm
    Vocational course do exactly that FM. The problem is not enough people are going into vocational education now - at least not for the skills we need like the trades (mechanics, electricians, plumbers, brickies, painters/decorators etc). The kids today don't want to do apprenticeships of 4-5 years (like my brother did) and parents are pushing them into university.

    I remember when I was at school we were told to study hard, go to university to get a better job. My sister, 5 years younger, was told study hard go to university to get A job! So this is nothing new.

    30th Mar 2016
    7:46pm
    I can't see what all the fuss is about, $42,000 is not peanuts as a lot of Australians are living on less than that. HECS is paid out of the amount earned over $42,000 and as much has been made about "old cars, backsides out of pants" and the like, earning that much would be living a life of luxury. Statistics show that those with degrees have a better chance at entering the workforce and earning 21% more than those without a degree yet all those other people also have to save for homes, cars, raise a family and pay for living expenses.
    particolor
    30th Mar 2016
    8:58pm
    That's a Twinkle in a Bucket to the Amount the Federal Government has Borrowed ! :-(
    Maybe they didn't get enough Money for the Australian Assets they sold Off at the Government Supermarket ?? :-(
    Anonymous
    30th Mar 2016
    9:58pm
    I agree particolor but savings have to start somewhere. If it is a household thing, a bought cup of coffee a day can make a small saving and can be the start of reducing household expenditure. As has been said over and over, it's the expenditure that is the problem, not the income.
    particolor
    30th Mar 2016
    10:19pm
    I haven't bought a Cup of Coffee nor a Take Away in 15 Years !
    Still drive 1985 Car ! Although the only part of it that I bought that's left is the body :-) I don't go out anymore only to Garage sales, Vinnies & Salvos . :-) I make everything I need and repair anything !
    My Neighbours love Me ! Because they Break everything they touch :-) :-) But Im Happy and get by :-) ..Now whens Pension Day ? :-)
    Lecheman
    31st Mar 2016
    1:43am
    Rather than the average Aussie having to forego their coffee, how about the pollies reduce their exorbitant allowances and copious pay rises. Strewth! How I would love a $400k salary right now.
    particolor
    31st Mar 2016
    8:41pm
    I'm not Greedy 30,000 would do me ! :-) Slightly above the Poverty Line ! :-)
    In Outer Orbit
    31st Mar 2016
    2:17am
    This problem is universal. It just looks like a further attempt at debt transfer from the older generation to the young. We can't blame or condemn the young for not being able to pay it back. They didn't create this mess.

    In the UK the earnings threshold for student debt repayment is £21,000, with no index linking - ie it will stay at £21,000 for years to come, ie in real terms the threshold will get lower and lower. That's currently LESS than A$40,000 pa.

    Not surprisingly, MOST students in the UK will never be able to repay their student loans, so as the UK Government debt keeps growing the terms for students will keep on getting tougher.

    A$54,000 threshold sounds like a dream to any European, and any American student would also jump at such a good deal. Looking at other countries suggests that Australia is still a very lucky country.

    The real question is, why are the tertiary educators around the world being allowed to get away with miss-selling all these useless qualifications, and why are all the school careers advisors just colluding in the process? Is it because the Unis first priority is to make money, and the schools are desperate to look smarter by sending more kids off to Uni, not caring what happens to any of them in the longer term?There are too many vested interests here all forgetting that in the end it is gullible young people and their families who are being parasitised? It's easy to be fooled by what tertiary education USED to be. In my view, today it is substantially a rip off industry world-wide. As ever, buyer beware.
    ex PS
    31st Mar 2016
    9:32am
    In Outer Obit, the grab for cash by state tertiary organisations in Queensland started in the 90's when the state government insisted that organisations like TAFE did not over spend their budgets. The government of the day said (and rightly so) "If you overspend your Director will be held responsable funding overspend will be with held from your next budget and you will also pay an additional penalty.
    This was fare and seemed to work, the problem was it worked too well, the next phase is the cause of the problem.
    The directors were told "We know expect you to make a profit and you will be penalised if you don't.
    By this single change to the education and training strategy TAFE was turned from a primarily quality training organisation into a government money making venture that put money before students.
    This strategy encouraged such practices as ensuring students comenced at least one session of each module of their courses as quickly as possible so that if they dropped out they had to pay for the whole course. There are many other tricks that are used for no more reasopn than to make more money. We also had a situation where teaching staff were encouraged to be "flexible' when assessing students to encourage companies to keep sending apprentices to us.
    Governments running education as a money making enterprise, bad idea.
    4b2
    31st Mar 2016
    9:34am
    My understanding of HELP loans is they apply to TAFE certificate and Diploma courses. These courses were increased greatly by the Current LNP government (regardless of who their leader is). The loans are to repaid in lump payments over a period of two or more years, unlike the HECs scheme for Degree loans which are paid back in income tax. Why cant the same scheme be used for both? But then why cant the LNP go after their BIG END friends to pay their fair share of TAX
    AngelMamma
    31st Mar 2016
    4:27pm
    Hey 4b2, I have a HECS debt which I am currently accumulating due to studying. However, some years ago I also had a small one which on starting employment I mentioned on the Tax Declaration form. Subsequently, I was taxed each pay for the debt. BUT every year, not having reached the set level for repayment, I received the money back. Lovely big refund cheque from ATO and too easy to spend on bills or fun items. So now, studying and gaining a larger HECS debt are no problems for me, I have chosen not to pay them until I need to through the ATO, knowing full well that if I actually get a job and I don't meet the $ level, I will receive it back. As far as I am concerned I paid they didn't take it and so I took it back. Their loss!
    Richied
    31st Mar 2016
    8:15pm
    Oh Angelmamm

    That sort of attitude is the reason we need to reform HECS.
    shirboy
    31st Mar 2016
    12:08pm
    I feel so sorry for this generation that are hit with such high educational costs. Why does our government have to give billions to Indonesia ? These students & others of this age will never be able to afford to have their own homes.I was told that it was Bob Hawk who introduced fees for education. I bet he never had to pay for his lofty degrees.
    particolor
    31st Mar 2016
    8:05pm
    I think it was John Howard ?
    Those Madrassa's aren't cheap to run in Indonesia ! The Imams are on a good Earner, and its only Neighbourly to help them out ! :-)
    ex PS
    1st Apr 2016
    10:11am
    I seem to remember that in the good old days if the government gave you a free education you were required in some circumsatnces to give back to the community by serving a certain amount of time in disadvantaged or remote areas.
    Maybe graduates should be offered a choice?
    KB
    1st Apr 2016
    2:53pm
    My daughter just oompleted her degree. Wants to pay her debt off sooner rather than later. There are not enough jobs on the job market to start paying her HELP loan off. Instead she will pay smaller amounts off with whatever casual work she manages to get The Government should encourage graduates to pay back ssmaller amounts so the debt is paui off sooner,,
    Fair Go
    23rd Jun 2016
    8:31pm
    Why oh why can't education be FREE in Australia? It is in most if not all European countries, as they say a good education is good for the country. If they can do it, why can't we? We are supposed to be a wealthy first world country.


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