Private colleges get loans boost

October 7, 2005

The number of Australian private higher education institutions is increasing rapidly as the federal Government extends its deferred loan system to cover their students.

Universities can offer students subsidised tuition fees and deferred loans through the Higher Education Contribution Scheme but, until this year, private institutions were unable to provide anything similar.

In January, the Government introduced a scheme of loans for students willing to pay full fees to enrol in the public and the private sector.

Although the loans are capped at A$50,000 (£21,550) they are interest free and have to be repaid through the tax system only if a graduate's income exceeds A$35,000 a year.

There are 33 private colleges approved to offer the students loans and 60 more have applied to take part. In the past, the small group of private providers was mostly made up of theological colleges or business schools, whereas the newcomers offer certificate, diploma and degree courses in a wide range of areas including health and hospitality, natural medicine and public safety.

One of the private institutions, the College of Law, claims to be the largest provider of legal training in Australasia and has expanded to set up centres in several states.

Following the introduction of the loan scheme this year, the number of full-time students taking out loans through the private providers has jumped to more than 45,000.

The Australian Council for Private Education and Training attributes the rapid expansion in enrolments directly to the scheme.

The council wants the loan scheme extended to students enrolled with private vocational education institutions. If the Government agrees, it would lead to a similar sharp rise in the number of private colleges and students undertaking technical and vocational education.

The privatisation of higher education continues apace, with public universities enrolling increasing numbers of full fee-paying Australians and other providers also offering loans for full-fee courses.

But the debt burden carried by students borrowing to obtain a qualification has increased sharply.

The latest figures show the amount owed by tertiary students and graduates has jumped to more than A$13 billion. Government estimates suggest that nearly a third of the debt is unlikely to be repaid. The amount written off has risen fourfold since the election of the Howard Government in 1996: from A$690 million to nearly A$2.9 billion last year.

Jenny Macklin, the Opposition's spokeswoman on education, said students and graduates had been "saddled with massive levels of debt". She added: "They are going to carry those levels of debt throughout their lives and even carry them to their deaths."

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