1. repayments are contingent on income. You don’t start repaying until your income reaches a certain level. As Mark points out the current repayments start at far too low an income and the rates are too steep, but that’s not a problem with HECS per se.

2. The loan has a zero real interest rate. This is important to stop personal debt levels from getting totally out of control.

3. Repayments are collected through the tax system, which is nice and simple.

4. The Commonwealth is the sole provider of the loans, which avoids “losing” money to middlemen. In the early 90’s about half of the US financial aid went to students with the rest “subsidising” the financial institutions providing the loans. (The Commonwealth also adds a 33% surcharge to the loan, which they market as a 25% discount to those who don’t take the loan. This is another highly regressive aspect of the current implementation.)

As for “free education”, it’s a poorly-framed piece of rhetoric that distracts us from the real issue which is how to we ensure that financal considerations are not the primary barrier stopping people from accessing higher education. Abolishing tuition fees is not the only possible solution.

Seriously - compare the loss of $90 a fortnight from taxable income and borrowing eligibility and the increase in the price of housing, and maybe you’ll see there’s a point for those lucky enough to be on the average median income.

My heart weeps for you.

Most people spend more on mobile phones and alcohol each week than that.

And after probably less than 10 years you had fully paid off your HECS debt, no?

Get a grip, lad.

Let’s say you get a job paying 40k a year. After tax, if you had no HECS debt, your fortnightly pay would be $1210. With a HECS debt, it’s $1140. It gets worse as your pay goes up.

There is a big difference in the mechanics of how the loan is repaid and yes, HECS is a superior system, particularly because repayments are contingent on income which is not the case in the US, but we weren’t talking about that. This is the real disincentive for poorer people - the threat of having to make significant repayments as soon as you graduate.

Anyway, my point (if you can call it that) is that the “American System” gets a bad reputation because people tend to hear about the small, private, elite and very expensive institutions and think that’s the whole story. Most students can be very heavily subsidised by the State and Federal Governments and the institutions - far more than they are in Australia. State University tutition fees may be more than in Australia but you haven’t considered the non-loan financial aid that’s available. If my fees are $10000 per year and I can get $8000 worth of grants, I’m better off than if my fees are $5000 completely covered by a loan.

Next you will be pointing out that having a HECS debt in no way limits your borrowing ability to buy a house or car (in fact it probably increases your borrowing power). Or, that there is no compulsion, if you don’t ever earn enough in Australia, to pay off the debt, even in death.

Sheeez . . .

Harvard ( a very expensive elite university) has undergrad tution fees of about $28000 per year (with total fees including room and board of about $41000), but also provides over $80 million in financial aid for it’s 6600 undergrads (on top of the State and Federal Govt aid that’s also available). Average Harvard aid per undergrad is about $30000.

Conversely, the University of Texas (a large State Government System comprising nine distinct universities and six hospitals) charges tuition of about $6000 per year and there’s $3 billion dollars of financial aid available to residents of Texas.

Full-fee undergrad positions in Australia are upwards of $15 000 per year for tuition alone. I wouldn’t be surprised if Australian students have the largest education-related debts anywhere in the world.

(FWIW the UTexas System dervives a lot of money from a $13billion trust used solely to support UTexas and Texas A&M. I can’t conceive of an Australian Government leaving that much money around for Universities, or for anyone else)

I do have the links lying around if anyone wants them - the magazine asked I compile them so they could check my stats.

Mark:

1. Perth is perhaps a more special situation. It has 4 public universities, all of which fulfil slightly different roles in the courses they offer. UWA is more the hard sciences, law and literature, Curtin is Business, IT and soft humanities, ECU covers education and has a much lower entrace requirement, not sure exactly what Murdoch’s niche is but it has one. If you combine them, you lose this.

Perhaps more importantly, the 4 are very different culturally and demographically.

2. That point is mostly derived from the 4Q program, which could I suppose have been a bit misleading in some places. Are you talking about the current or new ARC system that Nelson is bringing in (or has just brought in?)?

3. Erik was fairly adamant these test were a bad idea, and that many students were getting 100% regularly without doing any work. If universities could afford to hire more staff, the marking load would be lower. Surely at least comprehension that isnt that ridiculously easy is a better option? Also I think small tutorials are better for students in almost every possible way, but thats just a personal opinion based on my own and people I know’s experience.

4. I mentioned that didnt I?

5. Again, 4Q may have been unbalanced. Theres definately been a standards drop here recently, though.

Even if the extent of the problem has been exaggerated, it is indeed a very serious problem that must be addressed.

Brian: I agree, but wouldnt that be the exception rather than the rule? I cant see too many of those situations occuring and Im not aware of any in Perth.

Students need a wide range of choices to get the most out of their education; a merger reduces choice, especially in a small place like Perth.

Nic, this isn’t always true. For example there are, or were, in Brisbane three different but related courses in the area of food technology offered by three different universities in SE Qld. Each course is quite small. There would be clear advantages in offering one course, properly resourced, with a greater range of internal options, thus enabling the employment of more specialised staff.

Such solutions are too rational for our system. But they tend to happen automatically in larger state systems in the US which compete in size with our entire country.

But an interesting post and I share with your main comncerns.

Interesting piece.

A few quibbles:

1. Most of the Universities already take a fairly uniform approach to teaching and learning - and are encouraged in doing so by the current policy settings and by competition through marketing and prestige/status rather than differentiation. For instance, there is probably no need for almost every university to have a Law School. This is a legacy of the Dawkins era and has not been addressed by Nelson, despite his rhetoric. Therefore further amalgamations (which I would nevertheless oppose) might not decrease diversity materially.

2. The research funding model does not necessarily encourage applied research at the expense of pure research - that’s more the incentive for universities to attract industry partners for research. There’s not a massive amount of skewing away from humanities and social science research in the current ARC system.

3. Multi-choice tests drawn from publishers’ websites can be pedagogically useful - particularly in large introductory courses where attention to the text is necessary and equity is a big consideration in assessing a large number of students as well as the cost of marking assessment. Similarly, there are valuable alternatives to small tutorial groups - quality of teaching and curriculum design is often more important than the manner of teaching.

4. The biggest single contributor to stretched resources in Universities is the abolition of salary indexation (originally in part a decision of the Labor government in 1995 but compounded by Vantsone in 1996).

5. Having just taught a cohort of overseas students in a large Business course, I share concerns about the adequacy of their preparation. However, I haven’t perceived in our Department any lowering of standards, though I am aware of it in other Departments. There may be some over-generalisation there.

There’s also a big differential of standards across different universities (and sometimes campuses) among Australian students - which is in large part a function of the massification of higher education.

Nevertheless, I share the general concerns as articulated in your article - but I think you’ve overplaid some of the discrete factors.

Russell - most of the LNG is offshore and not treated as WA’s for Royalty purposes. Are you suggesting achange in those laws? And you want to be careful about allowing market forces in the hiring (and firing???) of employees because the Unions will be after you. They are up in arms about allowing AWAs for Uni staff at the moment.