The HECS Controversy
4 September 2004
There is a huge controversy not just in Australia, but overseas
as well, about the level of private debt being carried by students
through schemes such as HECS.
There is a nervousness around this country about the impact of
HECS increases, so it is important firstly that the concept of a
HECS debt is understood. Secondly I wanted to point out that some
of the issues that have confronted USC are unique, in the history
of higher education in this country, and need also to be
understood.
Firstly, HECS was introduced by a Labor government. It was
initially a modest amount which it was claimed, reflected the
private value dimension of higher education to an individual.
Degrees demonstrably provide for better life chances and careers
for graduates. The Democrats opposed HECS. The Coalition
subsequently increased HECS, and today, depending on the university
course, it can be an amount that most people feel uncomfortable
about - hence the controversy. Many people believe that a greater
proportion of the cost should be covered from the public purse, and
there are many precedents to indicate that higher levels of GDP
than at present have been or are being carried by governments.
It is also important to remember that HECS is a deferred, not an
up-front cost for the great majority of students. The threshold for
repayment has been raised substantially to $36,000, and no one has
to repay that debt at 6 per cent per annum until they have attained
that salary level.
Where students hurt most, it seems, is whilst they are studying
and are having to meet the up-front costs of books, travel,
photocopying and so on. Certainly that is the major message that
has been conveyed to me by many students.
This brings me to my second point on the unique position of
USC.
Next year's increased funding formula for USC clearly
demonstrates that we have been under-funded for all our early
years. Despite the shortfalls, staff have accomplished miracles,
and students enjoy and benefit from their experience here. We do,
however, have to increase those benefits and will be better
positioned to do so from next year, but we will not be able to also
catch up completely on the lost years of the under-funding.
It was that circumstance, coupled with demands for even better
facilities and support that led USC to decide to increase HECS.
Unlike any other university, however, all of the increased HECS,
will go to support initiatives that will have a direct up-front
benefit for students by providing them with a range of options
which they have told me they want. The student experience at USC
will actually be enhanced next year if we levy HECS at the higher
rate.
I say, 'if', because if Labor wins the election, they have
publicly committed to reversing the HECS levy for next year. If
that happens we shall not be able to provide the same level of
up-front support for students, which is where so many are at
greatest risk and in greater need, but they will also have less
long- term debt.
In 2008-2009, the Labor blueprint may also produce better
results for universities through annually indexed grants, but this
is still unclear for USC.
For USC, however, the need for funds is, as it has been since
1994, immediate.
The issue of higher education reform is therefore a very vexed
one, and the HECS levy is particularly contentious but these are
not easy problems to solve, and there are no simple solutions.
It needs to be understood, however, that getting rid of the HECS
levy will not necessarily mean an easier route through the study
period for USC students. In fact, the opposite is likely to be the
case.
The bigger question, of course, is not the details of
differences between the two major political parties, but ultimately
whether there is to be a stronger commitment nationally to support
public universities - and that will mean a higher proportion of GDP
applied consistently over the years ahead, and accompanied by a
level of indexation that guarantees good salaries for good staff.
On both those counts the two main parties have been less than
convincing over the last fifteen years.
Professor Paul Thomas is Vice-Chancellor of University of
the Sunshine Coast