Demand grows in spite of debt

January 5, 2007

Trend reverses for home applications to university. Geoff Maslen reports

The number of Australians applying for university places for 2007 has increased, reversing a three- year downward trend.

Since 2003, many universities have been unable to fill their annual quotas of government-funded places. After failing to meet their targets, several institutions have had to repay millions of dollars - because they receive government grants based on the number of students enrolled.

This year, however, the number of applications rose by 1.5 per cent compared with the same time last year. But the number applying is still down by more than 15,000 compared with figures from 2003.

The sudden tail-off in applications after 2003 has been widely attributed to higher tuition charges and inadequate financial support for students.

With all but one of the 38 public universities increasing fees under the Higher Education Contribution Scheme by the government-set maximum of 25 per cent, many students now face debts of A$100,000 (£40,000) or more on completion of their courses.

Kevin Rudd, Australia's new Opposition leader, promised that Labor would slash the cost of university education if it were to win next year's election. He said it was a national disgrace that students from modest homes were being deterred by huge debts.

Labor's top priority in government, Mr Rudd promised, would be to cut the Hecs debt, which had soared 100 per cent in the past decade. He said a second priority would be to help students survive financially while studying rather than having to find part-time jobs.

"We are concerned about access and affordability. There is a huge Hecs bill now around the neck of the nation and also around the necks of individual kids from working Australian families," he said. "This is a national disgrace. It is appalling for the national economy and it is appalling for educational opportunities."

Under Hecs, students can defer repayment of tuition costs until they graduate and are earning more than A$35,000 a year. The debt is repaid through a tax surcharge. Most universities also offer full-fee places to students who miss out on a funded place, and the Government has increased the amount those applicants can borrow to cover the total cost of their courses - A$80,000 for most students, while those studying medicine, dentistry or veterinary science can borrow up to A$100,000.

The higher Hecs charges and the loans for full-fee students have pushed the amount that students and graduates owe to the Government to almost A$13 billion. The National Union of Students said that many graduates would see a substantial portion of their disposable income "disappearing to the tax office" every week for years to come.

But Julie Bishop, the federal Education Minister, said she was pleased with the rise in the number of applications, particularly as there had been a nationwide increase of nearly 4 per cent in the number of applications from school-leavers. Ms Bishop said the Government had created 18,500 additional funded places since 2003 and that unmet demand had dropped by more than 61 per cent.

"Students today have vastly improved prospects of going to university," she said. "This year, more applicants than ever received an offer of a place at university. I am pleased that more than 90 per cent of eligible school-leavers who applied to university received an offer - the best result in two decades."

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