Tax on studies hits enrolment

December 1, 2000

Australian universities appear to have experienced a dramatic fall in applications from prospective students, despite more young people becoming eligible to enter higher education.

Although no national figures are yet available, data from New South Wales shows applications have fallen by almost 14 per cent since the conservative government of prime minister John Howard doubled tuition fees in 1996. Students were previously paying about a quarter of the full cost of their courses through the deferred payment Higher Education Contribution Scheme.

But following its election, the Howard government imposed higher fees on all students.

Graduates had also been liable to repay their Hecs debt through a tax surcharge once their incomes reached A$28,000 (£10,000) a year. This threshold was cut to A$20,000, forcing earlier repayments from thousands of students.

Labor Party education spokesman, Michael Lee, said that apart from discouraging students from poorer families, the changes had made the Hecs repayment threshold so low that most part-time students, whose incomes often exceed A$20,000, were facing higher tax bills as they studied.

Mr Lee said the decline in applications was a national tragedy. "Our goal must be to increase, not slash the number of students seeking entry to university, especially at a time when there are severe shortages in areas such as information technology."

The National Tertiary Education Union said the fall in applications from older prospective students had been much greater than that from school leavers. In New South Wales there had been a decline of about 25 per cent among older applicants.

NTEU president Carolyn Allport said the financial burden created by Hecs could be a reason why the number of mature-age applicants had fallen each year since 1996.

Dr Allport said the government had commissioned no studies looking at the impact of the higher charges on older applicants since 1997, when initial research showed higher fees were having a detrimental effect.

"Action must be taken to reform Hecs and to ensure it does not pose a barrier to participation in higher education," she said.

Federal education minister David Kemp said, however, that the claims that Hecs charges were discouraging applications were inaccurate and not borne out by the facts.

He said a report last year found that family education background and attitudinal influences affected participation rates more than financial factors.

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