Postgrads Helping Postgrads to Succeed

The Council of Australian Postgraduate Associations (CAPA) condemns the idea of a loan fee proposed by the Grattan Institute to make money from Australia’s university students.

 

Justification for a loan fee relies on the myth that the Higher Education Loan Program (HELP) is unsustainable. However, given the recent data from the ABS on Higher Education enrolments, it is clear the student numbers are steadying after the introduction of the demand driven system.

 

The idea of a loan fee suggests that students do not already wish to avoid crippling debt where possible. Subsidising upfront or early repayment of HELP debt is a much better way to encourage payment from those students who have the means to pay early.

 

Attaching a 15% administration tax on HELP loans will only provide theoretical savings. In reality it will balloon out the national HELP scheme by $700 million and continue to hide the true cost of higher education. 

 

“If the concern is about managing the national HELP debt then policy should focus on encouraging investment in universities to create the innovative jobs of the future and improving employment outcomes,” says Peter Derbyshire, the incoming CAPA National President.

 

So called ‘bad debt’ has been an ongoing concern of the HELP loan scheme but adding a $700 million administration tax is counterintuitive if the Federal Government really wants these loans repaid.

 

Furthermore, an administration tax, which does not add any value to higher education, will discourage higher education participation for students from low socio-economic backgrounds.

 

“Slugging students a fee for using HELP loans would be like slugging patients with a GP-fee increase without the money going back into healthcare. It is time for innovative thinking when it comes to higher education funding policy, not more fee rhetoric,” Mr Derbyshire says.

END

For comment: Peter Derbyshire, current Western Branch President and incoming National President, CAPA, westbranch@capa.edu.au

capa-media-release-taxing-university-student-loans-is-not-the-answer

 

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