Australians burdened by costs of studying

May 12, 2000

Australian university students are sinking deeper into debt and within three years are expected to owe the federal government more than A$10 billion (Pounds 3.8 billion).

The debt is building up through Australia's Higher Education Contribution Scheme and a system of loans.

Before Hecs was introduced by a former Labor government in 1989, tuition was free except

for a A$250 "administration charge". But with rising enrolments, the then government needed additional sources of revenue and opted for a deferred payment system.

Students were required to pay about 25 per cent of the average cost of a course. They had the option of paying the reduced tuition on enrolment and receiving a discount, or defering repayment until they graduated and were earning A$28,000 or more a year.

The Howard government, elected in 1996, increased tuition charges and courses were grouped in three fee-bands according to tuition costs and future earning potential.

The government also increased the rate of return by requiring graduates to begin repaying their Hecs debt once their threshold income reached A$20,000, which was well below the average wage.

Under the new rules, universities can allocate 25 per cent of the places in a particular programme to full fee-paying Australians. Although fewer than 1,000 students have so far opted to take up full-fee places, as demand increases this is another likely growth area.

Increased charges and the lowering of the income level doubled Hecs receipts - from A$850,000 in 1993 to A$1.7 billion this year.

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