HECS-HELP “Loan Forgiveness” Thoughts - Good or Bad

[Deactivated] on 18/11/2024 - 20:47

Curious what OzBargainers think of the various HECS-HELP loan forgiveness programs the Labor Government is buying votes with has announced over the past few months. My wife saw an article on facebook and people were pretty mad about it, but that was back when it was only a de-rating of the 7% interest down to 4% or whatever. I’m a bit mixed on it. Hard to say I have strong feelings other than annoyance at how the Aussie system is always changing rules post-hoc.

There are two major changes:

  1. Changing of interest rate from CPI to the lower of WPI or CPI. This will be backdated a couple years back to when we had that 7% interest event.
  2. Reducing repayment thresholds and forgiving 25% of all outstanding balances. The 25% forgiveness offsets the fact that lower repayment schedule = more interest paid over loan lifetime.

Personally I will have a small benefit from both policies, although it’s slightly annoying in that I have made voluntary repayments prior to the 7% interest slug.

IMO the 25% discount is literally just buying votes. If the repayment schedule is to be reduced to match the original intention of the scheme, then what’s wrong with the total expected interest payments that were also part of the original intention of the loan? Nothing except it’s a point of weakness before an election.

Poll Options

  • 415
    Good
  • 447
    Bad
  • 33
    Don’t really care
Financial HECS-HELP

Comments

                      • Jolakot on 19/11/2024 - 14:33
                        +7

                        @arkie0: That sounds like a personal failing, why weren't you born here in the 60s so that you could have received free education then? Same with buying a house, should have been out there hustling instead of in preschool. You snooze you lose.

                        In all seriousness, I'm right there with you, I've paid mine off completely and would be frustrated too. But as they say; the best time to make something right was yesterday, the second best time is today.

                        It makes no sense to saddle young people with debt and give old people tax benefits. You need that money and borrowing capacity most when you're young with an endless list of expenses (especially young families) and minimal asset, and need it least when you're old and have a lifetime of assets.

                        • sakurashu on 21/11/2024 - 16:31
                          +1

                          @Jolakot: Does anyone really see hecs as saddling young people with debt? Our housing crisis has multiple times the impact on young people and families, hell, even inflation on food probably has a higher dollar impact at the moment than a hecs debt

                          • Jolakot on 21/11/2024 - 20:44
                            +2

                            @sakurashu: Absolutely, it's a huge factor when trying to get a mortgage, and a decent drain on cashflow with repayments.

                            It's certainly less of an issue than the housing crisis and inflation, but that doesn't make it not an issue

                • SlickMick on 19/11/2024 - 11:06
                  -2

                  @Jolakot: I have no idea whether your pram/ submarine analogy is comparative.

                  I suspect that if you were in charge we'd be spending our $3000 on learning the language of our new overlords.

                  • Jolakot on 19/11/2024 - 13:23

                    @SlickMick: We need submarines and a strong navy to protect Australia, but nuclear submarines are a terrible investment.

                    If I was in charge I would build 10 diesel submarines for $20 billion, and refund $12600 to every Australian over that time period.

                • [Deactivated] on 19/11/2024 - 12:11

                  @Jolakot: Can’t put a price on fighting climate change mate. Diesel has got to go.

                  • Jolakot on 19/11/2024 - 13:26
                    +1

                    @[Deactivated]: Diesel is a misnomer, they're actually electric submarines with a diesel generator that charges the batteries when out at sea, like a hybrid car.

                    How about we allocate another $20 billion and buy some extension cables, so we can plug the submarines in to the local wind farm while they're out at sea?

                • R4 on 19/11/2024 - 16:09
                  +1

                  @Jolakot: My understanding is that it's 8 new submarines yet to be designed but likely an advanced Astute (with VLS) or Virginia-type built in Adelaide. In the interim, we get 3 or 4 current Virginia-class boats built in the US. Also, the $368b number is for all of those boats plus bases, manufacturing facilities and maintenance for the lifetime of the force. I'm not saying this is good or bad before the arc up comes in, just saying how I believe that number will be spent.

                  • Jolakot on 19/11/2024 - 17:27

                    @R4: That's why I said it wasn't an entirely fair comparison, as it's the total program cost, and I believe future-inflation adjusted too.

                    If it was $80 billion, this would be important.

                • nigel deborah on 19/11/2024 - 17:11
                  +3

                  @Jolakot: Not entirely fair, modern submarines cost a lot more than they did in 1999 (even adjusting for inflation). When Australia was considering Soryu subs the unit price was $2B, built in Japan, excluding other program costs and sustainment.

                  $368B for AUKUS subs includes not only the submarines, but infrastructure, sustainment, training, and shipyards. Most importantly, building them locally is incredibly expensive, but in real cost to the economy terms, isn't as expensive as it sounds (since the money is spent locally).

                  I think a rough comparison number for an off the shelf Virginia submarine is 6-8B dollars, so about 3-4x more than a conventional sub.

                  • Jolakot on 19/11/2024 - 17:52
                    -1

                    @nigel deborah: I did say it wasn't a fair comparison for a number of reasons, hard to compare total program costs over several decades. This would matter if the cost wasn't astronomically higher. The financial benefit of paying significantly more to build them locally is also dubious, other than for economic stimulus.

                    I think a rough comparison number for an off the shelf Virginia submarine is 6-8B dollars, so about 3-4x more than a conventional sub.

                    Of that $368B, how much do you think could be shaved off by buying off-the-shelf diesel submarines? Including less infrastructure required, less training, etc.

            • zathras on 19/11/2024 - 18:34
              -1

              @Jolakot: But you wouldn't have blue water anymore if you cut the diesel submarines in half…..

          • larndis on 22/11/2024 - 21:50

            @SlickMick: A better plan than submarines that will never be delivered and if somehow they are will be late, astronomically over budget and not fit for purpose? Yes actually, I do have have a better plan than that. Literally anything.

        • brendanm on 19/11/2024 - 17:59
          +7

          If we restricted the free uni to actually usefully degrees, and didn't allow career students, sure.

          • larndis on 22/11/2024 - 21:52

            @brendanm: Sure, who should we entrust with making those decisions then? What about fees, do we just reimburse whatever the unis decide to charge? What about TAFE and RTOs?

      • Assburg on 19/11/2024 - 10:45
        +7

        Dude almost everyone who is a professional takes work home. At home, I think about issues and chat with partner about work for the additional perspective on more complex issues.

        Much to my dismay I also sometimes get the work laptop out to check if things I've been waiting on have a higher level of urgency.

        I also take calls pretty much around the clock from juniors (provided it's for a good reason) because we work in a very high pressure field and I don't want anyone to waste energy on anxiety created by me being less approachable, or having my team members dwell on things alone.

        Sadly, for my sins, I do not get 3 months off a year, and still long to burn out and become a year 12 history teacher. I'm always looking at how low those master of education fees are but.. our 30s are for burning ourselves into the ground, right?

    • SlickMick on 19/11/2024 - 09:23
      +8

      No, just the qualifications Australian needs over the next x years. If you want to study whatever you want, you pay for it yourself. I've you're willing to fill a gap where you're needed, we'll fund you to get there.

    • afah0447 on 19/11/2024 - 14:45

      That ship has sailed and is never returning no matter what occurred in the past.

    • whatgift on 21/11/2024 - 19:33
      +2

      Disagree - there are already too many students doing courses they either don't finish or never use the qualifications gained. At least students going to Uni know they are going to pay for the study they do and shouldn't be choosing it unless they are fully committed.

  • happydude on 18/11/2024 - 21:31
    +19
    1. Changing of interest rate from CPI to the lower of WPI or CPI. This will be backdated a couple years back to when we had that 7% interest event.

    Good. Government debt should not have been at a rate higher than a personal loan. A fair fix to this weird economic outlier that had WPI and CPI so disconnected.

    1. Reducing repayment thresholds and forgiving 25% of all outstanding balances. The 25% forgiveness offsets the fact that lower repayment schedule = more interest paid over loan lifetime.

    Bad. Money better spent elsewhere.

    I did once see Mike Rowe (from Dirty Jobs) talking about student debt forgiveness and how many blue collar workers take out take out car, truck and tool loans for their employment or to start businesses. They will earn less on average but no one will think twice about forgiving the loans they take out. Made me think.

    Basically, we have a great system in HECs. But America has a shithouse system and we seem to be importing America's 'debt forgiveness' solution without actually having America's education financing the problem.

    • [Deactivated] on 18/11/2024 - 21:43

      Good. Government debt should not have been at a rate higher than a personal loan. A fair fix to this weird economic outlier that had WPI and CPI so disconnected.

      I agree with the change backdating it is the only objectionable element. They had plenty of time to pass legislation before the indexation was applied but they didn’t. Now it’s conveniently gonna happen right before an election.

    • Benoffie on 18/11/2024 - 22:11
      -5

      There's no money to be spent.

      This is the problem with the language. They call it a loan, but it's not. Its a tax debt that sits against your ATO account in a special pocket and attracts the indexation etc.

      There's no loan. The govt doesn't give people money and they dont require it back to function. They arent a bank.

      Its a policy decision to tell tax payers 'see, its not free'. Problem is, the administration of it and the money it sucks out of the economy - is it working as intended?

      • happydude on 18/11/2024 - 22:41
        +4

        The money is paid to the university on behalf of the student.

        It's a loan. It's is the title - Higher Education Loan Program (HELP).

      • Montassis on 21/11/2024 - 15:19

        Lol then who pays the univeristy?

  • pizzaforlunch on 18/11/2024 - 21:34
    +18

    "buying votes" so just democracy?

    • Flying Ace on 19/11/2024 - 09:20
      +10

      "Buying votes" is a bad thing, unless they're cosying up to big businesses or mining companies, then it's a good thing.

    • [Deactivated] on 19/11/2024 - 12:12
      +23

      money for other people = “buying votes”
      money for me = “sensible policy”

  • askbargain on 18/11/2024 - 21:44
    +7

    infinite money glitch. we can all work at uni

    • arkie0 on 18/11/2024 - 21:58
      +3

      100% of the population can have PhD's now too

      • FireRunner on 18/11/2024 - 22:46
        +2

        Super smart society, winners all around

        • Heiks9000 on 19/11/2024 - 12:19

          Finally, we can all get free access to EDU stores. Will cost taxpayers thousands of dollars each year but who cares when we can save personally $100 ;)

  • AwesomeAndrew on 18/11/2024 - 21:56
    +11

    Bad for people like me who used their savings to pay off their student loans when the rate was 7%, now can't take advantage of the 25% discount. I agree with changing the interest rate to lower of WPI or CPI, and with the reduction of repayment thresholds, but I don't agree with the 25% forgiveness.

    • 6079 Smith on 19/11/2024 - 09:08
      +1

      But why would you cash out savings to pay off a loan that in real terms doesn’t ever increase, seems like not the best financial decision.

      • gainsgainsgains on 19/11/2024 - 13:59
        +5

        Because if you paid it off by 1 june 2023, you got an instant, 7% return on your savings, higher than any savings account was offering. Now, people who made a sensible financial decision at the time (to pay off their hecs being indexed at 7%+) based on all available information, are now worse off. I cant get my savings back and retroactively apply a 5.5% pa interest rate.

        • diondai1 on 19/11/2024 - 15:51
          +2

          I think they're giving a retrospective credit back to those who did pay it off before the indexation. Don't know what they'll do about the 25% off though

          • [Deactivated] on 19/11/2024 - 21:54

            @diondai1: If you whacked $20,000 down to pay off your loan prior to 1 June 2023 you didn’t get charged the 7% in the first place so they won’t give you a refund on interest which you didn’t get charged in the first place. More to gainsgainsgains point, they aren’t going to give you a time machine to go back and put that money towards a better investment knowing that your HECS-HELP debt is going to get a 25% write down in two years.

            What you’re probably thinking of is that people who were charged that 7% but subsequently have paid off the entire balance of their loan will have the refund paid towards other debts or refunded as cash.

      • [Deactivated] on 19/11/2024 - 15:27
        +1

        Unfortunately I don’t have any real dollars in my bank account, only nominal dollars.

      • buckethat on 19/11/2024 - 23:51

        Makes sense in some case - i.e. me, gave me about ~110k extra borrowing capacity.

    • SpainKing on 19/11/2024 - 15:15
      +1

      What if they also said you got a 25% refund of the highest amount your loan had reached in lieu of the 25% discount, would you then agree with it?

      Why do you not agree with it now? Is it because it feels unfair to you?

      • AwesomeAndrew on 19/11/2024 - 15:47
        +2

        I would support the government if they instead just made all uni courses cheaper by 25% over the next few years. Applying a refund is also just a one off thing and just seems like vote buying without making life easier for future students.

        • SpainKing on 19/11/2024 - 16:03

          I'd support cheaper education in the future too. With the way this lot's carrying on though it feels like they'd be against it because "why should I have had to pay 25% more just because I went a year earlier." To only make it cheaper for a few years would also come across to me as vying for votes. Vying for votes isn't necessarily a bad thing, as the parties have to come up with policy that people want to get elected

          I'm not opposed to an unexpected windfall and supporting our past/present students with the current proposals. Not every policy should be about improving the lives of those in the future, we're in a cost of living crisis and people need support both now and in the years to come

          Please help me to understand, why do you turn your nose up so much at the 25% reduction part of this policy? What are the negative impacts aside from you missing out because you paid it off early (which would suck)

          • AwesomeAndrew on 19/11/2024 - 16:08

            @SpainKing: I meant to say spread the reduction over the next few years, such as 10% reduction in 2025, 10% reduction in 2026, 5% reduction in 2027, this way the impact of the change won't be so sudden. It is intended to be a permanent reduction.

            As I said earlier, the negatives about the way the 25% policy is implemented is that it only considers current and past students, and it's implemented in a way that messes up people's financial planning.

            • SpainKing on 19/11/2024 - 16:33

              @AwesomeAndrew: A 25% permanent reduction in education costs would be awesome Andrew. If I was being difficult, I would say it's an unknown cost to the government to offer a permanent 25% reduction in perpetuity, compared to the known cost of once-off debt forgiveness, making it difficult for the government to perform their own financial planning

              It could also be so popular it would be difficult to remove if it ended up detrimental/not working as designed (like with negative gearing), or encourage more immigration for a cheap, internationally respected degree that adds to the brain drain we're currently suffering from and takes places from local students

              The 25% policy only helps past and present cohorts, but the rest seem to benefit everyone. It seems unfair to expect every policy in a bill to benefit past, present and future students, so some targeted relief isn't something I'm against

        • virhlpool on 21/11/2024 - 15:40

          Nailed it, mate. It also sounds unfair to those who had HECS and repaid it by working hard or those who will have in future. Why not just reduce the fees or make tertiary education free so that it's same for everyone in future?

  • JIMB0 on 18/11/2024 - 22:00
    +13

    What about those of us who paid our fees upfront or have already paid off the loans?

    • Benoffie on 18/11/2024 - 22:03

      At lower indexation or in periods of 10-20% upfront discounts?

      Or when a basic degree was $5-10k?

      • JIMB0 on 18/11/2024 - 22:08
        +4

        The upfront discount was finished by the time I started. Mine is going to end up costing close to $40k, maybe I should let it go to the HELP loan in case they decide to forgive it. I don't want to be missing out.

        • Benoffie on 18/11/2024 - 22:13
          +1

          Its a fair question. As soon as the discounts stopped for bulk repayments, I stopped paying.

          Its a tax debt. If they arent going to incentivise me, then they can come after me when Im dead…

          Oh wait…🤦‍♀️

      • simplystu on 19/11/2024 - 00:27

        ooh - we aren't living in 1996 anymore - or even close to that.

        back then it was roughly … $1,500 - $2000 "per semester"

  • Benoffie on 18/11/2024 - 22:01
    -4

    Good and doesnt go far enough. Without going into it:

    • HECS debt shouldn't exist. If any debt must exist it should be the subsidised course + a reasonable admin fee
    • all indexation should be forgiven
    • the loophole around banks factoring it mortgage calculations needs to be removed
    • everyone should get 96 credits (one UG course) free, HECS should apply after that
    • as a counter, HECS should be recovered from estates
    • miwahni on 18/11/2024 - 22:14
      +7

      It's not a loophole as such - anything that reduces your disposable income also reduces your borrowing power. This is part of the banks' responsible lending provisions. Remove that from your servicing calc, and next thing you know some graduate with a $60k debt will be on ACA crying about their mortgage repayments being too hard to handle and accusing the mean old bank of lending them more than they could afford.
      And APRA has instructed FIs to include HECS balances in calculations of debt-to-income ratios as well. See Prudential Regulation 220 for that little gem.

      • Benoffie on 18/11/2024 - 22:16
        +4

        No, I agree - banks are doing their job, rightly so.

        However, speak to a pollie and theyll bleat on about how it's not allowed to be a factor.

        Well, it obviously is, for thousands of people. And Canberra needs to be honest about the actual impacts of their teriary policies, none of which the University Accords fixed

      • Benoffie on 18/11/2024 - 22:21

        Forgiveness is free if it's created and neverhas a possibility of recovery.

        How much is repaid annually? And by what tax bracket? Im interested to know.

        Would also like to know current expenditure on universities, tafe, free tafe, all CSP, all government scholarships for part or full tuition for both domestic and international students.

        See, tertiary is messy. And that doesnt even touch grants, research etc (also huge swathes government funded)

        But I guarantee you that HECS will be added to the death tax list proposal within 18 months

        • arkie0 on 18/11/2024 - 22:26

          Forgiveness is still lost income the government was expecting to get

          I feel like chatgpt didn't estimate correctly because it only counts the cost the government subsidies too, not the full cost of the course - like 100k for the cost of the course for a full fee place.

          Government currently spends 48B a year (23-2024) on education - though that's primary + secondary + tertiary

        • larndis on 22/11/2024 - 22:08

          Suggest you start with reading the Annual Report and Portfolio Budget Statement for the (Commonwealth) Department of Education. Not sure but possibly the same docs from the ATO also have some info on HECS.

          You can thank me later.

  • sumyungguy on 18/11/2024 - 22:30
    +6

    I read an economist's opinion piece in the Fairfax media suggesting people who went to uni have a lifetime income a third higher than those who didn't. Forgiving the debts of higher-income earners doesn’t make our nation fairer or more prosperous because whom do you think will end up making up the shortfall?

    • stumo on 19/11/2024 - 16:35

      The bit you missed is that higher income earners also pay more tax over their working lives.

      So if they aren't saddled with crippling debt at the start of their careers, they are more likely to have money to invest in new ideas/businesses/start-ups/whatever early in their careers. - leading to a bigger economy, more jobs, more tax take.

      • brendanm on 19/11/2024 - 18:06
        +9

        They aren't saddled with crippling debt, it's a loan used to allow them to earn more money, that only needs to be repaid once you are working and earning a wage. The same people that complain about this "crippling debt" happily go and buy a car of the same or more value on credit, and whine about HECS, even though it's an investment, and the car is a liability.

        • sakurashu on 21/11/2024 - 16:41
          +3

          Spot on - the crippling debt line is nonsense, nobody in the history of the world can point to one person crippled financially by a hecs debt

  • inexpensive tastes on 18/11/2024 - 22:41
    +6

    Ms Broome said higher income earners had thousands of dollars held by the ATO each year, but it was not paid directly off their student loan.

    "If you are having money taken out every fortnight depending on how you are paid and it is not actually reducing the debt, then that does seem to be unfair."

    https://www.abc.net.au/news/2023-04-03/student-debt-rising-h…

    Imagine taking out a loan only to find your compulsory weekly/fortnightly repayments go……somewhere…..for the whole remainder of the working year. You might expect each payment should reduce the principal but no. Instead, at the end of financial year you watch with disappointment as your loan amount increases to indexation and then FINALLY your repayments (that have gone AWOL for up to a year) are used to reduce the new (higher) $ value of the loan. No opportunity to reduce the loan and indexation burden through frequent repayments.

    That's the current situation for those with HELP loans. No idea what happens with the money held in trust by the ATO(?) for the financial year. Is it earning interest? If yes, who gets the interest?

    Now of course there's another side to this. What if you're a student and you don't work or lose your job for part of the year. Those repayments when you were earning money were taken on the assumption you'd earn a certain amount (above the threshold) for the whole year. If at tax time you wind up below the threshold, you basically get money back that should have gone to repaying your loan. Is that a good or bad thing? You can look forward to that jetski come tax time! Joke obviously but it's a bit perverse….

    So it's very possible you could carry on for a long time if you don't have success with employment, have medical situation or become a mother (see article) etc. etc. The loan may not meaningfully go down for many years.

    edit: I don't know how to block quote

    • [Deactivated] on 18/11/2024 - 23:41

      Imagine taking out a loan only to find your compulsory weekly/fortnightly repayments go……somewhere…

      As you alluded to, they’re held in trust in case you don’t actually incur that liability, in which case the money is refunded to you. It’s more a problem with PAYG than with HECS-HELP.

      As for HECS-HELP not crediting you those repayments prior to calculating interest, it’s unfortunate but honestly it’s a small fraction of the overall indexation/interest value. We are talking about maybe 10% of your total interesr but most likely less esp. for lower earners (consider say a $4,500 mandatory repayment (average out to only $2,250 across the year) against a $27,000 loan). Much bigger issues are the exorbitant upfront fee, not capping indexation to WPI (yet), and lack of incentives for early repayment. The current system does have one incentive for early repayment which is you get the whole year credited, which is nice.

  • Pikaloo on 18/11/2024 - 22:44
    +1

    They should just raise the repayment income thresholds to > $500,000 per year.

  • AustriaBargain on 19/11/2024 - 04:00
    -1

    It's good. We've had free education before and I suspect that in the next few decades education will be free again because AI will probably able to deliver most course material for many degrees virtually for free. Some degrees will always be expensive, but they will be a bit cheaper too in the future. So why not forgive the debt.

    • garddn on 19/11/2024 - 08:18
      -1

      No one will need degrees because of AI.

  • Dollar General on 19/11/2024 - 05:30
    +24

    The outrage against it is mostly from boomers. A generation that had free university education.

    I would rather see HECS debt paid off in small portions, free for each year you work in Australia, rather than getting an education here and taking your talent overseas

    • nedski on 19/11/2024 - 22:48
      +3

      Hmm that is actually a pretty good idea.

    • Brick Tamland on 21/11/2024 - 11:19
      +1

      I don't understand why Boomers would be mad when they never paid for uni education anyway. If anything I thought GenX and GenY might get annoyed when they had to pay HECs in full

    • sakurashu on 21/11/2024 - 16:43
      +1

      30 years old here - completely against it. Not sure why you think it's mostly from boomers - hopefully a reliable source

  • ForkSnorter on 19/11/2024 - 05:48
    +4

    How much do university degrees cost nowadays? I paid about $25k for a 4-year degree. Back in my parents' day, university degrees were free. Now Australian universities seem to be diploma mills/profit machines. The university schools pass as much of the teaching as possible onto postgrad students and part-timers so that they don't have to employ many full-time staff with full salaries. On top of that, very few of the lecturers at Australian universities are trained teachers who actually know how to teach. If I was an 18-year-old nowadays, I'd honestly consider doing an online degree via Coursera or something.

  • Trying2SaveABuck on 19/11/2024 - 06:38
    -3

    personally think we need to go the other way - the threshold should be 'lowered' and the payments should higher but thats just me

    it shouldn't be up to taxpayers to pay for individual decision - esp considering how many people just leave and never pay the money back seems like a poor policy from a government desperate to stay in power after a disaster of a term

    the arguement 'uni was free' - is pretty stupid as less then 10 percent of the population went to uni back in the 50s now we have around half the domestic population taking on study post high school - times need to change to keep things sustainable the only exception would be degrees that lead to jobs we have shortages off or dire need - ie nurses teachers etc

    i would perhaps have some kind of 'uni is free' program for students study skills shortage degrees and work in 'regional' or area of need for xx amount of years but otherwise the HECS system is a good system unlike the US student loans system and the government is just wasting more taxpayer money for people who ultimately should end up higher income earners

    • Jolakot on 19/11/2024 - 10:08
      +8

      the arguement 'uni was free' - is pretty stupid as less then 10 percent of the population went to uni back in the 50s now we have around half the domestic population taking on study post high school - times need to change to keep things sustainable the only exception would be degrees that lead to jobs we have shortages off or dire need - ie nurses teachers etc

      We should go even further than this and charge everyone who got a degree for free back then the full cost of the degree today.

      Why are you talking about the 50s, university was free until 1989?

      • Trying2SaveABuck on 19/11/2024 - 18:12
        -1

        Honestly wouldnt be opposed to charging cashed up boomers for their degrees i know you joking and practically it could never happen but i wpuldnt oppose it

        Too much money is wasted on 'education' when most of our shortages are in manual skills jobs

    • smartazz104 on 19/11/2024 - 12:20
      +5

      it shouldn't be up to taxpayers to pay for individual decision

      Whilst we're add it, maybe we can stop giving taxpayer funds to private schools.

  • justworld on 19/11/2024 - 07:35
    +10

    Uni is already subsidised by the government, and it's a good investment from a financial point of view - on average, anyway. Uni grads make a lot more than non-uni grads. Also, uni fees in Australia are very reasonable. So the government is just further subsidising a group of students who are, on average, privileged to begin with - and who were already subsidised to begin with.

    If the government tied the fee relief to certain conditions (i.e. limited to those from the lowest-income families, or with the highest uni marks) I'd be a lot more supportive of it.

    • worrierwan on 19/11/2024 - 10:40

      The amount the government subsidises is dependant on the course type (funding cluster). Not all students get the same subsidy from the government.

      E.g.
      Law and Accounting students pay $17k (HECS amount), and the government subsidises $1.3k per year
      Teacher students pay $4.6k (HECS amount), government subsidises $15.5k

      The HECS for law and accounting students are so high now, its going to hurt those studying it for a while.

      Link

      • brendanm on 19/11/2024 - 18:09
        +8

        It's almost like they want people to do the degrees relevant to where there is a workforce shortage 😮

        • greatlamp on 20/11/2024 - 19:34
          -2

          You can make that argument from the sidelines, but the government knew in advance that increasing the cost of certain degrees would have close to zero impact on student demand. It was always known to be a way to tax young people more in a way that would be palatable to voters.

          If the intention was to stop people studying degrees which have too many students they would simply cap the number of funded places, rather than reducing the subsidy amount and allowing their investment to be wasted on students that cannot find work in their field

          • brendanm on 20/11/2024 - 20:15
            +2

            @greatlamp:

            wasted on students that cannot find work in their field

            Perhaps the potential students should engage their brains before starting a degree that has no job prospects?

            • greatlamp on 20/11/2024 - 20:23

              @brendanm: You are being incredibly simplistic. Try putting yourself in the shoes of a prospective student. Engage your brain 😄

              • brendanm on 20/11/2024 - 22:15

                @greatlamp: Yep, I wouldn't be choosing a field already oversaturated with grads. That's just dumb.

                • greatlamp on 20/11/2024 - 22:55

                  @brendanm: If you were so smart you would understand that no individual student imagines themselves to end up unemployed. Do you assume that you are would fall in the bottom half of any class you studied?

                  • brendanm on 21/11/2024 - 07:56

                    @greatlamp:

                    If you were so smart you would understand that no individual student imagines themselves to end up unemployed.

                    I honestly don't know what you are on about now. Lots of people imagine this, as they look into the actual employment prospects of the degree they are wanting to do. It's called looking at least one step ahead.

                    Do you assume that you are would fall in the bottom half of any class you studied?

                    I've never been in the bottom half of anything I've done? Again, I'm not sure of your point. If I were to go into a field where there are 100 times more qualified people than there are jobs, I would very much assume that I may not be able to get employment in that field, as that is very basic probability.

                    • brendanm on 21/11/2024 - 09:26

                      @brendanm: Actually that's a lie, I got terrible marks in LOTE in high school, we did Indonesian and I hated it.

                    • greatlamp on 21/11/2024 - 11:07

                      @brendanm: How about a scenario that is realistic.

                      You seem to be surprised that a student who is interested in studying law, where there are 2x more people than jobs, doesn't abandon their interests before they even begin their studies and choose to become a nurse instead. You don't assume you would be in the bottom half of any class you attempt, that is how others think as well.

                      You are looking at the statistics from the end point and not the decision faced by students - hence why I said you aren't taking the point of view of a prospective student.

                      I think my point is very clear, I'm not going to engage further as its obvious you are just ignoring straightforward reasoning.

                      • brendanm on 21/11/2024 - 15:12
                        +1

                        @greatlamp:

                        You seem to be surprised that a student who is interested in studying law, where there are 2x more people than jobs, doesn't abandon their interests before they even begin their studies and choose to become a nurse instead

                        I didn't express surprise at any point here.

                        A lawyer and a nurse are quite different things. I'd say there would be things much closer to law than nursing, that would be appropriate to choose instead.

                        At any rate, if people want to choose to get a law degree, more power to them. If they can't get a job in it, and still have to pay their HECS, that sucks, but that's life. Perhaps the government should give me a loan so I can buy $100k worth of shares in a random lithium mining startup. If it works out, I'll pay a heap of capital gains tax. If it doesn't I should have my loan forgiven, because I gave it a go but failed.

                        I think my point is very clear

                        Sure, apparently no one thinks they won't get the job, and if they don't, we should give them a "good try" gold star, and forgive $75k in loans because they failed.

                      • sakurashu on 21/11/2024 - 16:47
                        +2

                        @greatlamp: Your point was very clear and a bad take - we shouldn't just cap numbers because people should have the freedom of choice but at the same time if their choice was bad and they have to pay for it then that's the real world.

                        • greatlamp on 21/11/2024 - 17:31

                          @sakurashu: This is the real world:
                          Currently their choice can be bad and the taxpayer will pay for it. HECS debts aren't the full cost of study, the government subsidies a portion as well.

                          Why should the government fund places when they say themselves those places are excessive?

                          If you believe in free choice that is noble, that isn't how it works in the real world. Places are limited by funding already, the universities currently recieve a total amount of funding and decide the number of places to offer in each course based on what is most profitable for them.

                          • sakurashu on 21/11/2024 - 19:50

                            @greatlamp: Sure but the subsidy is more or less based on what the degree is and whether the government thinks we need more or less of them, right? This directly affects course offerings but isn't a hard cap. Regardless of the government subsidy if i really want to study something now i can just pay

                            • greatlamp on 21/11/2024 - 20:33

                              @sakurashu: I've already addressed this point. It doesn't affect course offerings, student demand is unchanged. Universities are encouraged to use their limited funding to maximise profits, so they offer more places in the courses which are the cheapest to provide - which are coincidentally the same courses with too many graduates.

                              Regardless of the government subsidy if i really want to study something now i can just pay

                              You can always study as a full fee student and pay 20k+ per year, that isn't what we are discussing

  • Matrix Attack on 19/11/2024 - 09:09
    +23

    Man, this is problem with Australian society. Most Australians just look at issue from the lens of do they benefit?

    I am not benefiting from this HECS forgiveness scheme but I am supporting it because frankly we need more people to be able to read longer posts on ozbargain and provide feedback on key social and political issues. You are not going to be able to have a good discussion if people cannot read more than a few lines of text.

    It is the same as people that doubt the efficacy of a good higher education. I keep seeing people write TLDR which means "too long didn't read" and it is like you have stepped into a different world because you have people that went to university who can read it, whilst you have another portion of society that are heavily dependent on finding bargains which cannot. I do sometimes wonder if we put those people with a free higher education would they still need to be looking hardcore for these bargains on everyday essentials.

    For example I can tell you it is very common for me to be reading multiple 50-100 page judgments daily… Then I come here and I am flabbergasted at how different the average part of our society is. Frankly, most people do have the attention span of a goldfish…

    We need to change that by having good policies that promote education. If we made higher education free starting from tomorrow, under the thought process of the OP, it would seem they would be against it because they had to pay for it. That's a very odd way of looking at things.

    • [Deactivated] on 19/11/2024 - 11:40
      -7

      We need to change that by having good policies that promote education. If we made higher education free starting from tomorrow, under the thought process of the OP, it would seem they would be against it because they had to pay for it. That's a very odd way of looking at things

      I find it bizarre that you can read a 50 page judgement but are apparently unable to muster up the effort to read my short little OP. The word drongo comes to mind. The only aspects which I specifically objected to were that the indexation change will be backdated, and the 25% discount on all outstanding debts. Neither of the policies have any specific effect of “[promoting] education” because no current or prospective student will benefit from them. They are obvious ploys to buy votes, and the only thing they are intended to “promote” is a feeling of gratitude towards the Albanese Government.

    • justworld on 19/11/2024 - 17:53
      +1

      "For example I can tell you it is very common for me to be reading multiple 50-100 page judgments daily…"

      Yes - I do this for a living.

      But I didn't have any difficulty paying off my HECS. It was minuscule as I had a CSP and part-scholarship.

      What's the difference in principle between giving someone like me fee relief and giving someone like me a tax cut? Because a lot of people seem to have been against the larger stage 3 tax cuts.

    • brendanm on 19/11/2024 - 18:12

      It's almost like reading important documents for work deserves more time and effort than some idiots whinge posted on here.

    • Alice McGregor on 20/11/2024 - 13:53
      +1

      If uni taught how to write succinctly I wouldn't have to tldr so many people. It's not that I can't read, it's that most people can't write.

    • EFC94 on 22/11/2024 - 17:24

      Out of curiosity, how are you "reading" 100+ pages a day on top of your daily work requirements? Are you just skimming documents for certain keywords or points, or are you actively reading every word on every page like a novel?

  • 6079 Smith on 19/11/2024 - 09:23
    +11

    I love the logic of "it doesn't help me so I don't like it".
    In the same vein if you already own a home I assume you're opposed to increasing the First Home Buyers Grant (or similar policies) because you don't directly benefit ?

    • SlickMick on 19/11/2024 - 09:39
      +3

      That's not the same vein, FHBG is driving up the value of my property.

      I wouldn't pay myself for the quality of education I've observed, and don't want my tax money paying for it either.
      The cost has gone up heaps, but the quality seems to be moving in a different direction. I wouldn't pay more than nothing.

      I got a diploma back in the day when the gov paid me to do it (fed me, accommodated me, and gave be an allowance), a degree when an employer paid for it, a grad certificate when I got a sponsorship, and I'm thinking of doing a a free tafe certificate next year.

      • 6079 Smith on 19/11/2024 - 10:47
        +2

        You understand that the free tafe course is paid for by tax money ?
        Also all your other studies were as well. HECS doesn't cover 100% of the cost of these courses, universities get a ton of money from the goverment and heavily subsidise their courses.

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