Real interest rates on HECS fees will slug students and families without helping universities
15 October 1999
Prime Minister Howard’s statement today that Cabinet would not deregulate university fees but would consider a real interest rate on HECS has been greeted with derision and dismay by the National Tertiary Education Union.
`This option means that students with a current HECS debt of up to $16,500 would have their debt increased by the application of market interest rates. Students who take longer to repay their debt because of low incomes or taking time off to care for a family will end up with a bigger interest burden than those who can afford to pay up-front,’ said NTEU President Dr Carolyn Allport
`This is simply not fair to the middle-income Australians whom John Howard claims to represent,’ she said.
`In New Zealand, where deregulated fees and real-interest loans have been in existence for a while, a study by the University of Auckland found a 20% drop in the number of students from low decile backgrounds entering universities in the last four years. If it continues to grow at its current rate, the student debt is expected to exceed the national debt by 2025. No wonder the New Zealand Government is considering changing the policies which John Howard and David Kemp are asking us to consider.’
Dr Allport said that real interest rates on HECS would do nothing to help universities’ financial problems, as student HECS repayments go straight into Government coffers.
`Under current arrangements, universities wouldn’t get any of the extra money raised by slugging the students,’ she said. `HECS repayments go to the Government, not to universities. They are used to offset the government’s contribution to higher education, and so reduce the overall Budget bottom line.’
`So, if Government opts for the high interest rate option without increasing funding to universities, we’re facing a future where students are paying big bucks for a bargain-basement education.’
The NTEU National Executive met today and condemned the Government’s agenda for deregulation and interfering in workplace bargaining. The Executive has also voted to encourage all NTEU members and members of the wider community to support the National Day of Action to be held on Thursday 21st October.
Further comment:
Dr Carolyn Allport
National President
0419 349 064
Julie Wells
Policy and Research Officer
0418 357 499
Simon Kent
Policy and Research Officer
0416 101 536