Talk:Tertiary education fees in Australia/Rewrite

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Tertiary education fees in Australia are charged to all students but Australian citizens are able to obtain interest free loans from the government under the Higher Education Loan Programme (HELP) which replaced the Higher Education Contribution Scheme (HECS). Most students are Commonwealth supported, which means the Commonwealth Government pays a contribution to the fees and students are able to defer payment of the remainder of the fees, which for Commonwealth supported students are called the "student contribution". Some domestic students are full fee-paying (non-Commonwealth supported) and while they are able to obtain loans from the Government up to a limit, they receive no other direct government contribution to the cost of their education. Overseas students are charged fees for the entire cost of their education and are inelgible for any loans from the Commonwealth.

HELP is jointly administered by the Department of Education, Science and Training (DEST) and the Australian Taxation Office (ATO).

History

From the establishment of the University of Sydney in 1850 and the subsequent development of universities in Melbourne (1853), Adelaide (1874) and Hobart (1890), universities in Australia were small institutions designed almost exclusively to train upper class men for entry into a profession. There was very little research performed in Australia, although internationally prominent Australian academics were able to work at leading British universities during this time including Sir Douglas Mawson and Howard Florey.

Although some scholarships were offered by the universities and governments, these institutions usually required the up-front payment of very high fees by modern Australian standards of up to £700 per annum (equivalent to $31,000). The fees situation was the same throughout the Western world. There was little motivation and drive to reform the universities, as those disadvantaged by this system were predominantly poorly educated and the less affluent that completed secondary education were virtually guaranteed a job for the remainder of their lives anyway.

In 1940, the Curtin Labor Government decided to increase the size of the universities to complete more civil and military research. In order to do this, it dramatically increased the number of scholarships it offered to enter university and it allowed women to win these scholarships (they were previously exclusive to men). The Menzies Liberal Government also supported and extended the ability of ordinary Australians to attend university.

In the 1960s, the Federal Government encouraged and funded the states to establish new universities to cater for increasing demand. These universities were to be built in outlying suburbs and offer special research scholarships to encourage students to undertake postgraduate research studies. Many of the universities that were established under this scheme are members of Innovative Research Universities Australia.

During the early 1970s, there was a significant push to reform tertiary education in Australia to make it more accessible to working and middle class Australians and the Whitlam Labor Government abolished university fees in 1973. This decision did not greatly change the socio-economic backgrounds of students attending universities because only 20 to 25 percent of students paid fees as most had Commonwealth scholarships. Another reason for the lack of change was because low high school retention rates had resulted in many young people from disadvantaged backgrounds not completing secondary education and therefore never having the opporunity to choose to attend university.

In 1989, the Hawke Labor Government instituted a programme called the "Higher Education Contributions Scheme" or HECS. It was developed by economist and lecturer at the Australian National University, Bruce Chapman and championed by Education Minister John Dawkins. When introduced it was a fee charged to all university students of $1,800, but this fee could be deferred and repaid through the tax system when the student's income reached a certain level.

The new Howard Coalition Government in 1996 made significant changes to the HECS system. It created a three-tier fee system with the courses that the government considered to have most likelihood of generating income for students in the future (eg. Law and Medicine) being the most expensive and those least likely to (eg. Nursing and Arts) were the least expensive. The government also increased HECS charges by an average of 40 percent and permitted universities to charge full up-front fees to students who missed out on a HECS place at university in return for entry into a course. This decision (especially the decision to allow the universities to charge up-front fees) was heavily criticised by Labor and the Democrats who claimed it was an attack on equity.

Domestic Students

Commonwealth Supported Students

The Government allocates a number of undergraduate places to each public higher education provider in Australia that are designated as Commonwealth supported places at university. These places are allocated to students via the tertiary admissions centre in each state or territory but are usually based on secondary school results (through the tertiary entrance rank), TAFE qualifications and previous university results. Commonwealth supported places are available to citizens of Australia and New Zealand, as well as some Australian permanent residents. If a student is in a Commonwealth supported place, they only make a contribution towards the cost of their education (known as the student contribution) while the Australian Government contributes the majority of the cost.

Student Contribution
Band	Curriculum Areas	Contribution For 1 EFTSL¹
National Priority	Education, Nursing	$0 - $3,847
Band 1	Humanities, Arts, Behavioural science, Social studies, Foreign languages, Visual and Performing arts	$0 - $4,808
Band 2	Accounting, Commerce, Administration, Economics, Mathematics, Statistics, Computing, Architecture, Health, Engineering, Science, Surveying, Agriculture	$0 - $6,849
Band 3	Law, Dentistry, Medicine, Veterinary science	$0 - $8,018

The student contribution varies for each course. It is based upon the expected earnings following a students' graduation, not the cost of providing the course. The Government allows higher education providers to set their own contribution up to a maximum level. A student can pay the entire contribution and receive a 20% discount or defer payment on the contribution through a HECS-HELP loan from the Commonwealth Government. It is possible to defer payment on some of the contribution and pay part upfront. In cases of part payment, a 20% discount is received on the amount paid. Students who are New Zealand citizens or Australian permanent residents are ineligible for HECS-HELP loans and must pay the entire contribution upfront and receive no discount.

Full Fee-Paying Students

Students who do not receive a Commonwealth supported place are able to obtain a full fee-paying place as long as their tertiary entrance rank or other qualifications exceed a certain minimum. Most postgraduate courses do not have Commonwealth supported places available and therefore all students are full fee-paying. Full fee-paying students are charged the full cost of their course, with no direct Commonwealth subsidy.

Full fee-paying students are able to obtain loans under the Higher Education Loan Programme called FEE-HELP loans to cover all or part of their fees. Students who obtain these loans are charged a 20% loan fee on top of the amount borrowed. Students are only able to borrow a maximum of $50,000 (adjusted for inflation) throughout their lifetime in FEE-HELP loans. FEE-HELP loans replaced the Open Learning Deferred Payment Scheme (OLDPS), the Postgraduate Education Loan Scheme (PELS) and the Bridging for Overseas-Trained Professionals Loan Scheme (BOTPLS).

OS-HELP

OS-HELP is a loan scheme to assist some undergraduate domestic students to undertake some, but not all, of their course of study overseas. Students are able to obtain a loan of $5,000 for every six months, but can only receive a total of two loans throughout their lifetime. Unlike other loans in the HELP, the loan amount is paid directly to the student and the terms for the loans are set out by the tertiary providers.

As in the FEE-HELP loan scheme, a 20% fee applies on the amount borrowed.

Loan repayment under the HELP

HELP debts are repaid through the taxation system and repayment is adminstered by the Australian Taxation Office. People with a HELP debt are obligated to make compulsory payments each year if their HELP Repayment Income (HRI) exceeds a certain threshold, which for the 2005-06 financial year was $36,185. HRI differs from the usual calculation of taxable income in that it includes any amount that taxable income has been reduced by a net rental loss and includes fringe benefits from employment. Unlike marginal tax rates, the repayment rate applies to all income earned. For example, a person that earns $36,000 in a financial year does not have to make any compulsory HELP repayment, but a person who earns $36,500 is compelled to make a payment of $1,460.

The rates for compulsory repayment for the 2005-06 financial year are:

HELP Compulsory Repayment Rates
HELP Repayment Income (HRI)	Repayment Rate
Below $36,185	Nil
$36,185–$40,306	4% of HRI
$40,307–$44,427	4.5% of HRI
$44,428–$46,762	5% of HRI
$46,763–$50,266	5.5% of HRI
$50,267–$54,439	6% of HRI
$54,440–$57,304	6.5% of HRI
$57,305–$63,062	7% of HRI
$63,063–$67,199	7.5% of HRI
$67,200 and above	8% of HRI

Students are also able to make voluntary payments to the ATO. These payments attract a 10% discount. This means that if a person voluntarily repays $1000, the debt is reduced by $1100. HELP debts do not attract interest but are instead indexed to the Consumer Price Index (CPI). If a person with a HELP debt dies, the debt is cancelled (ie. the debtor's estate is not required to pay the debt).

Notes

^1 EFTSL stands for Equivalent Full-Time Student Load. It is a measure of the study load, for a year, of a student undertaking a course of study on a full time basis.

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