Big debt fears deter Aussies

Higher tuition fees and fears of incurring large debts could be deterring Australians from going to university.

Figures from the Australian Vice-chancellors Committee last week show that the number of Australians applying for a university place has fallen for the third consecutive year.

Universities received nearly 220,000 applications for places this year, down by more than 3,000 on 2005 after falling sharply the year before.

But although more than 14,000 students failed to gain entry this was less than half the number who missed out in 2004. While the Conservative coalition Government and the vice-chancellors said the figures were good news because they meant fewer students were missing out, the Opposition said the Government's decision to allow universities to increase Higher Education Contribution Scheme fees was driving students away.

Jenny Macklin, the Opposition Education Spokeswoman, said the figures were further evidence of the discouraging effects of the Howard Government's Hecs rise.

"Students are being discouraged from applying to go to university at a time of a national skills shortage," she said, adding that the Government had failed to create enough places for teachers, nurses and engineers, yet schools, hospitals and businesses needed more qualified staff.

Under the Hecs scheme, students can defer paying tuition costs until they graduate and are earning more than A$35,000 (£14,000) a year. They then begin to repay the debt through a tax surcharge.

Most universities also offer full-fee places to students who miss out on a place, and the Government has lifted the amount they can borrow to cover the total cost of courses to A$80,000 for most students. Those studying medicine, dentistry and veterinary science can borrow up to A$100,000.

Higher Hecs fees and the loans for full-fee students have pushed the amount owed by students and graduates to more than A$11 billion. The National Union of Students said many graduates would see a substantial portion of their disposable income "disappearing to the tax office" every week for years to come.

But the AVCC said the reduction in the number of students missing out on a university place was good news.

Gerard Sutton, AVCC president, said the Government had in effect eliminated unmet demand by increasing the number of places it was prepared to subsidise.