Category: Student loans

Separate student amenities fees to return

Andrew Norton12 Comments

After much Coalition stalling, the government’s amenities fee legislation passed into law today. However, it is not a restoration of the previous status quo. The key differences are:

* while before 2006 unis could charge what they liked in a separate amenities fee, now it is capped – a maximum of $263 next year, with indexation for future years;

* before 2006, it was an up-front fee, but now it can be deferred through a new income-contingent loan scheme, SA-HELP;

* before 2006, there was no Commonwealth regulation of what they could spend the amenities fee on (though there had been some state legislation), but now there are some restrictions, including on political parties and local, state or federal campaigns;

* before 2006, there was no Commonwealth regulation of universities in their provision of general student and advocacy services, and now there is (same legislation, but not connected to the amenities fee – the trigger is receipt of Commonwealth grants, not the amenities fee).

So overall there is a substantial increase in bureaucratic complexity compared to the pre-2006 situation.

As longtime readers of my blog will know, my position is that both sides to this debate are wrong. A separate amenities fee is a relic of an earlier funding system, in which the Commonwealth paid grants that were specifically for academic matters (some of which they recovered via HECS from 1989), and permitted universities to charge students for non-academic matters.Read More »

Please study at home

Andrew Norton6 Comments

The bill introduced last month to reduce the discounts for up-front payment of student contribution amounts or early repayment of HELP debts (discussed here and here) contains a previously unannounced policy: to stop Australian students getting tuition subsidies or HELP loans if their course of study is primarily at an overseas campus of an Australian university.

Peter Garrett’s second reading speech explained the rationale:

As students are only required to pay back their HECS-HELP debt if they file an Australian tax return, there is a higher risk that HECS-HELP debts incurred offshore will not be repaid, or not repaid for a longer period of time.

I’m not sure how big a problem this is in itself, but it is a sign that the government is concerned about HELP debt held by people not living in Australia. That the government makes no attempt to recover HELP debt from Australians working overseas is one clear design flaw in the income-contingent loan scheme.

It’s a flaw that has been exacerbated by other changes to law and policy. As dual citizenship has been permitted by Australia and other countries, the number of people with work rights in multiple countries has increased. More people can work overseas, and it would be very surprising if we did not see more people doing so.

The source countries of migration to Australia have also shifted towards the Asian countries in which Australian universities have their overseas campuses. According to the 2010 enrolment data, nearly 7% of domestic students speak an east or south-east Asian language at home (and probably more can speak one, but tend to speak English at home). A similar proportion were born in those countries. It would presumably be relatively easy for them to return to Asia to study at an Australian campus.

The flow of people between Australia and other countries is not a problem it itself. But it becomes a problem when it interacts with a debt recovery system designed for a less mobile world.