Graduate tax dice dooms low paid to lifetime debt

February 21, 1997

Australians who take a five-year architecture degree may spend the next 55 years paying off their tuition fees, and still owe the federal government thousands of dollars, according to an analysis by the National Union of Students.

In a report on tuition fee charges imposed by the government this year, the union says graduates of medicine, dentistry and law who remain on relatively low incomes will spend their working lives repaying the HECS debt, plus whatever loans they took out through the student financial support system, Austudy.

The conservative government of prime minister John Howard raised fees under the Higher Education Contribution Scheme in its first budget last August. The government also introduced a three-tier HECS system so that students on more expensive courses pay more.

It also lowered the income repayment threshold by almost a third so graduates will begin repaying the fees they have deferred much sooner.

The report says the differential charges will mean that law students will now have to meet about 80 per cent of their course costs compared to science students who will have to pay about 65 per cent.

Graduates in the same profession earning the same income, such as teachers, will be repaying their HECS debts at different rates if they take different degrees or "were simply educated in more enlightened times".

The fact that graduate starting salaries have fallen dramatically since HECS was first introduced has forced the government to lower the repayment threshold.

The report argues that students will contribute a greater proportion of the cost of their degrees than their counterparts in most other countries.

It describes HECS as "a regressive taxation system with the dice loaded in favour of wealth".

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