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Australia’s higher education student support policy

Australia’s higher education student support policy. March 2006. The recent reforms. Our Universities: Backing Australia’s Future announced in May 2003, took effect in 2005 Increased Government investment in higher education - $11 billion over 10 years

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Australia’s higher education student support policy

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  1. Australia’s higher education student support policy March 2006

  2. The recent reforms • Our Universities: Backing Australia’s Future announced in May 2003, took effect in 2005 • Increased Government investment in higher education - $11 billion over 10 years • Around 39,000 new Commonwealth supported (‘HECS’) places by 2009 • Major changes to student financing arrangements, including HECS, to increase choices for students and ensure equity of access to higher education

  3. Commonwealth supported (HECS) students • Subsidised by the Government with students contributing, on average, around 25% of the cost of their education (this varies by course) • Eligible students have access to HECS-HELP assistance (loan or 20% discount for up-front payment) • Student Learning Entitlement (SLE) provides access to Commonwealth supported places from 2005 • 7 years of equivalent full-time study • additional SLE available for some courses (e.g. undergraduate courses longer than six years, honours courses) • lifelong SLE to encourage lifelong learning

  4. Allocation of Commonwealth supported places • The Australian Government allocates new places to providers in specific discipline areas at specific campuses • The Government is proposing to apply new National Strategic Principles for Higher Education (yet to be finalised) to the allocation of Commonwealth supported places and take into account: • the present and future skills needs of the nation, employment opportunities and employer needs • population growth • reasonable demand for places from students • the priorities of State and Territory governments in economic and social development • the need to sustain and grow provision in discipline areas of national importance and in national priority areas • the sustainability of higher education provision in regions • the sustainability of providers and the capacity of providers to deliver the places and a quality learning experience • the opportunity for collaboration with vocational education and training providers • the strategic priorities of higher education providers

  5. Student contributions for Commonwealth supported students • Commonwealth supported students pay an amount set by their provider • Amount must be between zero and a maximum set by the Government • Maximum depends on the student contribution band into which a unit of study is classified • Maximum is 25% above 2004 HECS levels (indexed), except for teaching and nursing

  6. Fee-paying students • Students pay tuition fee set by their provider • Tuition fee must be equal to or greater than student contribution paid by Commonwealth supported students • Generally limited to 35% of places in an undergraduate course • Generally, Commonwealth supported places must be filled before provider allowed to offer fee-paying places • Eligible students have access to a FEE-HELP loan

  7. The Higher Education Loan Programme (HELP) • HECS-HELP - for Commonwealth supported students • Loans and/or a 20% discount for up-front payment of student contributions • 75% of students choose to take out a loan • FEE-HELP – loans for fee-paying students • $50,950 lifetime limit (2006 indexed figure) • 20% loan fee for undergraduate courses • OS-HELP – cash loans to assist students undertake some study overseas • Maximum of $5,095 in 2006 • Maximum of 2 loans over student’s lifetime • 20% loan fee

  8. Repayment of HELP loans • Loans are repaid through the taxation system when a student’s income exceeds a minimum threshold ($36,184 in 2005-06) • The more a student earns, the more they pay (ranges from 4% to 8% of income) • Outstanding debts are indexed to reflect changes in the cost of living (the Consumer Price Index) • No real rate of interest • 10% bonus for voluntary repayments of $500 or more

  9. Some facts on HELP debts • Loans in 2005-06 • $2.3 billion • Persons with a debt outstanding • 1.1 million • Total debt outstanding • $11.5 billion • Average debt • $9,800 • Average repayment time • 7.1years(for fully repaid debts) • Debt never expected to be repaid • 20%of outstanding debt

  10. Current student support policy debates • FEE-HELP borrowing limit • 35% cap on fee-paying places • Outstanding HELP debt levels and doubtful debt

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