Aussie graduates escape debt

May 2, 2003

Increasing numbers of Australian graduates are leaving the country to escape having to repay their deferred tuition fees or to make enough money overseas to cover the bill, a report concludes.

The trend could increase if the federal government announces, as expected, increases in student charges later this month as part of its higher education reforms.

A report by the Council of Australian Postgraduate Associations suggests a brain drain is already occurring because of the study costs students have put off paying.

By June, students and graduates will owe the government more than A$9 billion (£3.5 billion) for the fees they have deferred under the Higher Education Contribution Scheme, the report says.

It notes that the number of Australian-born people emigrating doubled between 1995 and 2000, and is now at an unprecedented level. The age and destination of those leaving the country imply many are leaving for employment reasons.

The report says the government's reforms will increase student debt by allowing universities to charge top-up fees and boost existing tuition charges by up to 25 per cent.

Government sources indicate that the number of full-fee paying places will be doubled and a new student loans scheme introduced for top-up fees and full-fee places. The loans are expected to be at close to market interest rates.

Terry Lovat, secretary of the Australian Council of Deans of Education, said the report confirmed that Australia was struggling to keep its graduates. "We now have further evidence that student debt is a key factor in graduates leaving the country," he said. "Ironically, the brain drain is only being offset by the influx of New Zealand graduates fleeing even higher levels of student debt."

The report says the New Zealand government acknowledged that student debt was a "push factor" for increasing emigration. "Between 1997-98 and 1999-2000, nearly 4 per cent of the total New Zealand professional workforce emigrated to Australia," it says.

Student debt affects the capacity of graduates to own a home, have a family, and access private finance such as mortgages, personal loans and credit cards, the report says. Rising debt also means that Australians are delaying having their first child, and choosing to have fewer children.

The report says: "This is not just an issue that affects students and their families. As doctors, lawyers, dentists and vets accrue increasing amounts of debt for their degrees, compulsory debt repayments will compel them to increase the fees they charge their clients.

"All Australian taxpayers will have to pay the costs associated with an ageing population, as student debt restricts the number of children that families can afford to raise and contributes to more graduates leaving Australia."

The report says an ageing population will mean public spending on health, housing, care for the elderly and superannuation will increase at the same time as the working-age population funding decreases.

Details: www.capa.edu.au/briefing/impact_of_student_debt.doc

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