Hi all,
Amidst the Coronavirus pandemic and economic impacts, I had gotten me thinking what the Government should do (if anything) regarding HECS repayments.
I'm still formulating my opinion, but it seems like a potential area for the Government to target some form of stimulus.
Keen to hear what thoughts are out there on this
primary school is compulsory, not everyone has a right to attend university.
So say my hecs debt is 150k to become a doctor, but you are not academic and able to gain entry, you instead work a basic paying job your whole life, but you are happy to pay my fees, whilst I reap the kick ass salary for the rest of my life… come on.
How about the public pay my flight school costs of 100k to become a pilot
@Donaldhump: As far as I know there is a shortage of Doctors.
So if we train more doctors it is better for the community
As well as more doctors will increase the supply and therefore lower the cost of doctors.
Seems like a win for the community and win for the doctors.
I would agree that education guarantee should be for one Degree plus Masters and Doctorate but only for the same discipline then the user should pay.
I did'nt know Universities offered education in "Piloting" I would say this is "Training" and not "Education"
@Donaldhump: Well if its listed under an University Education and Its open for everyone then I think it should be "Free"
@diceman99: So ask yourself why no Aussie government has offered this to date.
Do you really think if you were a pm and offered this at the expense of tax payers you would be popular,
Your average gronk doesn’t want to pay another persons uni fees.
Peoples lives are their own business, and need to pay their own way. If there are shortages the government may subsidise the fees which they already do, or pay in return for low paying work post education such as teaching
@Donaldhump: University used to be free in Australia and / or subsidised 50-90%
University currently is free in other countries and in some countries is exorbitantly expensive and only for the privileged.
My overall opinion is that the population in general benefits from educated people more so than less educated people.
So if people are willing to forgo an income and study the Govt should be all for it.
Society wants Doctors
Society wants Astronomers
Society wants Engineers
Society wants Scientists
Society want Pilots
Society wants Teachers
I agree some Uni degrees are useless and not much benefit to society. Not all jobs require such specialisation but by learning and researching hopefully new advancements in technology and efficiency are made. We want these smart people to continue their education to hopefully provide a benefit to society as a whole.
Society wants Doctors
Society wants Astronomers
Society wants Engineers
Society wants Scientists
Society want Pilots
Society wants Teachers
We can import these workers.
@Donaldhump: You might feel like you don't want to pay for another person's uni degree but think of it like this. A lawyer or doctor who cost a lot to educate will pay many times their uni fees on taxes - so your taxes have made a profit. Doctors and teachers serve society - they may save your life and educate your children, for free (to you).
@Quantumcat: that is true, but how do you bring it in.
if you brought it in next year, are all the current pilots, doctors, dentists and lawyers happy to pay extra tax to fund the new ones, whilst paying off their own debts. where does it start? same issue with abolshing stamp duty in exchange of annual land tax, you would be pretty shitty if you just paid it. it would be a monster budget hit and im sure it has / was though about before.
Possible problems with free education is if education is free, and everyone can do it no questions asked with no ramifications of failing, lot of people will waste this and muck around, and/or you may end up too many educated people which will then lower wages and you could have an oversupply. Harsh to say but some people need to do the less skilled jobs.
you imagine if dentistry was free and there are a shit tonne of dentists hitting the market in 5 years etc.
its a fine balance and after commonwealth support it is pretty cheap as it is. its only 36k for a 3 year degree or so maybe less,going off 1.5k x 24 subjects
same issue with abolshing stamp duty in exchange of annual land tax, you would be pretty shitty if you just paid it.
Yeah this happened to me, recently bought a house in Canberra. Had to pay decent stamp duty and now have higher rates. Pretty shitty but oh well.
you imagine if dentistry was free and there are a shit tonne of dentists hitting the market in 5 years etc.
That is already catered for - higher demand courses have higher atar requirements to restrict the numbers. There's only a certain number of places available in each course each year.
The transition period is difficult that's true but it doesn't mean the concept itself doesn't have merit. I bet people who were a year too young to get free education were royally pissed off too!
@Donaldhump: From my experience the people that had the hardest times in the early stages of my degree (and those who dropped out) where those didn't have high academic results upon entry into University. That's easily overcome by the Universities having a hard limit of Govt funded places imposed on them based on the current and predicted need for that skill and people having to earn their place. Not the current system of any man and his dog gets a place if they scrape through the low entry requirement and then the Unis pump out a surplus of grads.
As for equity in tax payers funding the education other, if the number of places are matched to the end demand for that profession, then it's a benefit to society as a whole that we educate enough people to fill these roles our society requires. These people will likely also earn more and pay more tax. I'd also suggest that people still accrue a debt for their education, but that the debt is reduced annually if people work in the profession they were trained/educated for. That will ensure the tax payer is getting value for their money and people are making the most of their degrees. I'd also abolish any repayment threshold, if you earn income and don't work in what you chewed up tax payer dollars to learn, you start repaying your debt.
educate your children, for free (to you)
Actually they do not educate for free - they get paid because the Government pays, hence not free, unless you are very poor and pay no tax.
@Other: What I am saying is that it is paid by the government and at no extra cost to you (you'll have to pay tax regardless of where the government chooses to spend it, you don't have to pay extra beyond that to have your children educated). You shouldn't feel unhappy at your tax dollars being spent on teachers because you get benefit from it. If tax dollars are being used to bail out banks where their CEOs get billion dollar bonuses yeah I can see people having problems with that. But not when it is being spent on ways that improve society.
@brendanm: So you don't like doctors dentists teachers scientists journalists nurses.
You must like shop keepers merchants real estate agents and car salesmen
@diceman99: I never said they were the useless degrees. I was referring to the ones people get, and never do anything with, as they aren't applicable to anything in the real world, or are already massively oversaturated.
There would be even more people doing even more of these if it was all "free".
@Jugganautx: Gee you don’t say, I thought all those nba players had phds, and the fifo workers had chemistry degrees.
Personally I preferred it when there was a discount for HECS for the amount you paid off early. Gave you a good reason to want to pay it off when you didn't have. Now thats removed I'd rather keep all my savings and pay it off as slowly as possible as I'd rather have the money available (in case of pandemic or backup like now). In saying that, this has nothing to do with coronavirus.
Agreed
That used to be a good idea but now the indexation rate is well above what you can earn in interest, so you're better off clearing the debt ASAP.
You're assuming that interest rates will stay low. Word of caution - the money printers are going "brrr" worldwide at the moment.
They shouldn't do anything. Stop looking for an excuse for government handouts.
If you have no income or little income then you don't have to pay it.
Don't use the word 'government handouts' cause big corporates get them all the time so why not the usual blokes. I do however agree that it should be repaid back.
So people with HECS debt partner up and go to buy a home….what happens then with HECS debt, will it get in the way of said purchase by effectively lowering their wage due to compulsory repayments (once salary passes the cap)?
Yes, banks will typically look at your net income.
However, hopefully your degree has allowed you to earn more than you would have otherwise been able to earn without it, and even with the 5% deduction of your salary after a certain level, you should still be able to get by happily.
Yep, current remaining amount taken into consideration as a debt
Source: just went through the process
Thanks for the replies….always think HECS is a ticking time bomb for the overall economy (and residents) for this reason (rightly or wrongly I don't know).
Sooo, what is your opinion? You still haven't told us.
Deporting all international students first
Do you think education will cost more or less if we lose the international students who pay 30 grand a year?
Absolute Ponzi mindset
From a personal interest point of view I would want it to be waived. But objectively, I would say do nothing. I would choose do nothing as I want to pay the bloody thing off as soon a I can without using my savings. It works the way it is, only thing I would want is to freeze the inflation/interest being applied to it.
Right now most bank interest rates (and you have to pay income tax on interest too) are below the HEC indexation rate of 1.8%. The HECs indexation rate should really be lowered to something like 0.5%
I don't get option 1. If you freeze withholding isn't that the same as not withholding at all, or not freezing at all. How does it work is you don't freeze withholding? I'm confused.
MUMMMYYYYY PAY OFF MY DEBT MUMMMMMY
Should be free & debt waived, just like it was for Boomers
Forgive it all. I want my free shit, please. That seems to be the mentality nowadays.
The legislation on HECS is very clear and also very relaxed.
No need for any changes.
SO THE GOOD NEWS IS:
If you cant get a well paying job you wont be repaying HECS any time soon
HOWEVER:
The government will soon be looking at ways to bring in more money to offset the significant increase in welfare payments this year!!!!
Hence HECS is an obvious soft target to bring in more cash. Yes!
Expect that the government REDUCES the income threshold for repaying HECS debt so that they start collecting more money quicker!
Apart from wiping all HECS debts for Nurses and front line medical staff (doctors excluded) nothing….
Why the hell would you wipe it for them? while I respect what they do they are some of the least financially impacted in this crisis, I mean seriously they have great job security at the moment. While I respect what they do that is an insane idea. It shouldn't be wiped for ANYONE as you only pay it back when you are successful enough to be able to afford to pay it back in the first place.
They are putting their lives at risk mate…. that is the least we can do.
As are supermarket workers, delivery people, police etc etc.
@pjcook: how about we just do the sane thing and not throw money away for zero reason especially when so many people are in actual desperate need of assistance. We are already going to have a massive debt from this, giving out bonus's because you like what they do is foolish at best.
Nothing. Expect to pay for many years to come. It took me several years to pay back my HECS when I finished up in mid 2000s.
I was earning low wage for a while and I felt I got nothing for myself
Only thing you should do is make sure once it's paid off don't let your payroll keep taking money off you for HECs
Missing option 5 - the government should be able to take what's owed from your estate, or any inheritance that you leave for someone.
Ah yes, lets potentially kick young families whilst their down after one of the parents are unfortunate enough to die.
Lol. Sounds more like someone wants to weasel out of their own HECS debt.
Main issue is people are thinking government is kind of donating this money and no one will need to repay.
All these packages will be paid back by Australian tax payers. In form of extra taxes in near future and by increase in pension age and lot of other very creative ways.
Nothing is for FREE.
Here's a question, if HECS debt is tied to the CPI, then in a recession does your HECS debt decrease?
It isn't tied to CPI, not anymore, changed about 8 years ago. If I recall correctly they match it to the government bond rate. A slight difference that prevents exactly what you suggested from occurring
Looks like it is still tied to CPI according to the ATO website
On 1 June each year, indexation is applied to the part of an accumulated study and training debt that has remained unpaid for more than 11 months, for:
Higher Education Loan Program (HELP)
VET Student Loan (VSL)
Student Financial Supplement Scheme (SFSS)
Student Start-up Loan (SSL)
ABSTUDY Student Start-up Loan (ABSTUDY SSL)
Trade Support Loan (TSL).Indexation maintains the real value of the debt by adjusting it in line with changes in the cost of living as measured by the consumer price index (CPI). The indexation figure is calculated each year after the March CPI is released. It is based on financial figures collected by the Australian Bureau of Statistics over the previous two years.
March eh? Bad news for anyone with a current loan, if all this kerfuffle had happened a month earlier it might have dragged the two-yearly average down a bit.
I was referring to this change
http://www.abc.net.au/news/2014-05-27/is-charging-interest-o…
Maybe it never happened
Yes, but the CPI has to have a net decrease over the past two years. I believe it happened in 1998, HECS was indexed by -0.1%.
Over the last few years the HELP repayment rate has gotten higher and higher. Due to bracket creep most students end up paying a sizeable chunk of their pay in HELP repayment back to the government. Unfortunately this system isn’t perfect but it generally works. Now that all the Australians overseas are being asked to return home the government might be able to enforce HELP payment on a fair few of them who ha e avoided paying it. I don't think the government should make any changes to HELP repayment due to the coronavirus pandemic. Some courses such as nursing and teaching already fall into a lower student contribution band for HELP so they already got reduced cost education. However I do think the government made a mistake giving the pensioners an extra $1500 to spend but ignored overseas students. Pensioners normally stay at home and have relatively stable costs on the basics. They can’t take any holidays at the moment so what purpose is the $1500 for them? They don’t work so haven’t lost their jobs. Whereas the overseas students who are stuck here and have likely lost their part time and casual employment get nothing. I’m worried we are pushing overseas students into homelessness and poverty. People also have to remember that commonwealth supported places are funded in part from the general tax pool. Nothing is free, it’s just that you pay for it directly or contribute to it as part of your tax. Just as the military or hospitals aren’t free. Also just because there is a recessions (two quarters of negative GDP growth) doesn’t mean that CPI (the cost of things) goes down. Regardless the government keeps adjusting the HELP repayment rates higher so you always end up paying more of the loan off quicker and take home less pay. Where it is now at 10% for medium income workers is pretty steep. Paying HELP as well as mortgage in eastern seaboard cities, along with food utilities and insurance for health, car, home means most people’s wages go on just getting by. Having 10% extra income would make a massive difference to me.
From an ideological point of view, education should be free. So, wipe HECS
Education is free until you leave high school. After that it's your own choice.
Then that’s not free education. If you have the capability, cost should not hinder education.
there is no such thing as "free" education. Somewhere someone is paying, whether it is you paying directly through fees and hecs or indirectly through taxes you still have to pay for it. Our education system and methods of payment is one of the most flexible in the world.
@gromit: Oh of course I understand that. I an happy for my tax to be used to encourage more of a knowledge nation. Long term our society benefits.
As Paul Keating tried to shift our economy from menial labour intensive jobs to more knowledge based professions. Education is the key to better quality jobs.
But this needs a generation to achieve. Can’t just flick a switch overnight.
@Vote for Pedro: Then why wipe HECS? it is not an impediment to learning or education, it just ensures that a small portion of the costs is attributed back to the person at a future date when they can afford it. If the education was valuable to them then it won't be a problem, likewise if they still don't end up successful they have nothing to pay.
@gromit: I don’t dispute hecs is a half decent system. I went through it.
Ideologically I feel education should not come at a cost to the learner. Overall as a society, the benefit we reap from an educated population is far greater than the cost.
Also, there should be no leniency to entry for full fee payers. Don’t have the marks, don’t get in.
@Vote for Pedro: Ensuring some of the costs are passed on I think is an important part of a healthy system. It helps to also let the consumer of the education services see really how expensive they are to provide even though HECS is no where near the full cost.
@gromit: We don’t disagree on many aspects. But I remain a firm supporter in community funded education. It is my belief we all win in the long run.
I have a HECS debt and I think the system works well, whilst I accrued circa $40K of uni fees and probably crept up to $45K inclusive of interest charges at some point. It was still a worthwhile investment as now I enjoy a job which returns an income which by far exceeds the "opportunity cost" of going to uni. It did take a while before I started paying off meaningful amounts and having a negatively geared property helped.
However this was a benefit the government afforded me (i.e. allowed to go to uni without paying upfront) and would have benefited many Australians who may not have been able to afford to go uni or needd to take up an American college debt system so I am grateful for this system to be in place. Also note, say an average HECS debt is $35K - $40K you only need to be out of a pretty average job for 6 months to have lost that amount of income!
You do know opportunity cost would include the lost wages of not working when at uni? I’m guessing you were at least 4 years in uni, times that by your current salary.
You don't times it by your current salary unless you would have been getting that salary regardless of education. you have to time it by the salary you would have been earning without that education and then subtract the additional income you are now earning due to the education.
Yes, but that’s only if you are earning higher due to the degree. Being a plumber would pay higher than many degrees in Australia.
@Emerald Owl: To be honest if you were a plumber and then taking a degree for another career either cost is not an issue for you as you desperately want to do something else or you are really really bad at math. sometimes I wish I had taken a career in plumbing or similar trade (grew up on a farm doing plenty of that), then I see the poor bastards having to climb into my ceiling on a 35 degree day or into the mud under the house and I remember why I decided IT was for me.
@Emerald Owl: Perhaps If everyone had to pay the full cost of university, 20k to 30k per year, we would have a lot more plumbers and their wages would be lower.
Yes 4 years in uni, I was working part time on a petty wage. At age 18 - 21 and envisioning no uni degree, job options would be fairly limited and salary would be low. The outlier here would be taking up a trade.
Working in retail, hospitality, etc. full time would equal 60ish thousand a year.
Waive it? And what happens to those like me who just finished paying off their HECS?
What if you earn below the threshold and never pay off your hecs debt for over 40+ years, and the debt grow to $50K plus?
Then you never pay a cent of it back and have a real rough retirement with barely any super.
$150k super is possible with gov. co contribution if your on low income . Plus government pension is enough.
I think with the massive overspend and the aging population the aged pension is going to get tougher and tougher to survive on as the government will not be able to keep increasing it to keep pace.
@MuddyClear: if you are low income and never reach a level to even pay off HECS you are extremely unlikely to be in a no mortgage/non rent situation. you will be well and truly up the proverbial.
I think a lot of the saltiness surrounding HECS debts is precipitated by absurdly high rates for a sub-par education experience that will follow some people around for a lot of their lives.
The issue isn't so much the HECS debt, but the role that the system plays in enabling shitty practice from universities. Especially with regard to post-grad courses.
Should have been the first comment. Why did nobody mention this?
It may be a delayed cost, but it's not great value for money. Universities waste so much money on the "theatre" of education, running lectures that could just be online recordings, which requires paying staff, paying for new bigger more impressive lecture halls.
Really you're paying $1500 per subject for someone to read aloud their slides from last year, then give you the assignment description from last year, and pay a 1st year PhD student $25 to mark that assignment.
Don't forget the real scummy profs who prescribe textbooks that they wrote, and bring out new editions each year that make last years text unusable.
Something that pissed me off at UWA was the requirement to do 'broadening' units - 4 subjects outside of your study area to broaden the mind. That's 6 months and around $5k.
It might be helpful for the younger students, but I went in as a mature age. I wanted to just get in, get my degree, and get out, I didn't want to spend a whole extra semester doing random units!
If you take these views and get put in charge of the country, what do you do to correct it? Do everything you can to screw down the costs of university.
Which is exactly what is happening. The amount that a university can charge a student is fixed, by the government, as they are paying. thats why it costs the same to attend any university.
What else can they do? Accredit more schools as Universities to increase competition? That would make the issue worse with more useless degrees.
You mention the government as if their appraisal of a fair cost is accurate. It is not right that the youth are encouraged to go to university only to be saddled with debt and few useful skills.
I have an inkling that you likely graduated some time ago and may not be familiar with the cost of an education. Check out the prices for health related degrees.
The price of a degree is increasing because the proportion the government is covering has decreased.
The actual increase in the total cost of degrees hasn't increased more than about 5% per year. More recently they have reduced the yearly increase to levels that are arguably below the actual inflation in running costs. Universities are responding by maximising their international cohort, pushing masters degrees which aren't tied to government reimbursement, and creating new degrees, preferably online.
I also don't see what is the big deal with the cost of medical degrees for students. Paying 11k per year of full time university education, deferred to hecs, doesn't seem that exorbitant a cost to pay off after you finish your studies.
Keep in mind the full cost of medicine that the government pays is 35k. The exact same degrees are priced at 60k for international students where government doesn't keep the costs down.
Also keep in mind that the full cost of a high school education 13k for a student in a government school.
https://docs.education.gov.au/system/files/doc/other/2020-in…
Government should offer international students and temporary visa holders a fixed price flight home paid via the HECS scheme (QANTAS to be used for the flights due to their spare capacity). If people choose to return after this Covid-19 situation, then they pay it back like normal HECS but with a lower income threshold. This will save the Government needing to bail out international students and temporary visa holders.
/thread
Does not even need to be discussed past the first reply
They should erase my debt. But only my debt. They should pass a law just for me.
The same group of people who paid for your primary education