Higher Education Loan Programme
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The Higher Education Loan Programme (HELP) formerly the Higher Education Contribution Scheme (HECS), is a tertiary education funding scheme introduced in 1989 by the Australian Commonwealth Government. The Commonwealth subsidises the cost of tertiary education for Australian and New Zealand citizens and Australian permanent residents. The amount an individual pays for tertiary education is his or her Higher Education Contribution. HECS is jointly administered by the Department of Education, Science and Training (DEST) and the Australian Taxation Office (ATO).
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History
From the establishment of the University of Sydney in 1850 and the subsequent development of universities in Melbourne (1853), Adelaide (1874) and Hobart (1890), universities in Australia were small institutions designed almost exclusively to train upper class men for entry into a profession. There was very little research performed in Australia, although internationally prominent Australian academics were able to work at leading British universities during this time including Sir Douglas Mawson and Howard Florey.
Although some scholarships were offered by the universities and governments, these institutions usually required the up-front payment of exorbitant fees, up to £700 per annum (equivalent to AUD 31,000). The fees situation was the same throughout the Western world. There was little motivation and drive to reform the universities, as those disadvantaged by this system were predominantly poorly educated and the less affluent that completed secondary education were virtually guaranteed a job for the remainder of their lives anyway.
In 1940, the Curtin Labor Government decided to increase the size of the universities to complete more civil and military research. In order to do this, it dramatically increased the number of scholarships it offered to enter university and it allowed women to win these scholarships (they were previously exclusive to men). The Menzies Liberal Government also supported and extended the ability of ordinary Australians to attend university.
In the 1960s, the Federal Government encouraged and funded the states to establish new universities to cater for increasing demand. These universities were to be built in outlying suburbs and offer special research scholarships to encourage students to undertake postgraduate research studies. One of the universities established under this programme was Flinders University in Adelaide’s southern suburbs.
During the early 1970s, there was a significant push to reform tertiary education in Australia to make it more accessible to working and middle class Australians and the Whitlam Labor Government abolished university fees in 1973. This decision did not greatly change the socio-economic backgrounds of students attending universities because only 20 to 25 percent of students paid fees as most had Commonwealth scholarships. Another reason for the lack of change was because low high school retention rates had resulted in many young people from disadvantaged backgrounds not completing secondary education and therefore never having the opporunity to choose to attend university.
In 1989, the Hawke Labor Government instituted a programme called the "Higher Education Contributions Scheme" or HECS. It was developed by economist and lecturer at the Australian National University, Bruce Chapman and championed by Education Minister John Dawkins. When introduced it was a fee charged to all university students of $1,800, but this fee could be deferred and repaid through the tax system when the student's income reached a certain level.
The new Howard Coalition Government in 1996 made significant changes to the HECS system. It created a three-tier fee system with the courses that the government considered to have most likelihood of generating income for students in the future (eg. Law and Medicine) being the most expensive and those least likely to (eg. Nursing and Arts) were the least expensive. The government also increased HECS charges by an average of 40 percent and permitted universities to charge full up-front fees to students who missed out on a HECS place at university in return for entry into a course. This decision (especially the decision to allow the universities to charge up-front fees) was heavily criticised by Labor and the Democrats who claimed it was an attack on equity.
How HECS operates
Every year, the universities and government offer a certain number of HECS places available to Australian citizens, permanent residents and New Zealand citizens. A student can apply for one of these places through the tertiary admissions office in their State or directly to the university (depending on the requirements of the university).
When first introduced, your HECS was roughly AU$2000 per year of full-time study, irrespective of course or institution. This was intended to represent about 25% of the cost of your course. Changes in government policy have meant that in 2004, the amount of HECS you pay varies according to course. Courses are "banded" according to expected earning power. There were three bands, with a year of full-time study costing:
| Band 1 | $3,768 | Arts, Humanities, Social Studies/Behavioural Sciences, Education, Visual/Performing Arts, Nursing, Justice and Legal Studies |
| Band 2 | $5,367 | Mathematics, Computing, other Health Sciences, Agriculture/Renewable Resources, Built Environment/Architecture, Sciences, Engineering/Processing, Administration, Business and Economics |
| Band 3 | $6,283 | Law, Medicine, Medical Science, Surgery, Dentistry, Dental Services and Veterinary Science |
The above fees have, since 2005, been increased by 25%. National priorites (nursing and teaching) remains at a maximum of $3840. If the student intends to remain enrolled beyond the HECS Census Date (no debt is incurred if the student leaves before then), the student will need to lodge a “Payment Options Declaration Form” stating how they intend to pay their contribution. Students who are Australian citizens or Australian permanent residents can pay all or part of the fee "up front" and receive a 25% discount on the amount paid. The unpaid portion of the fee is deferred. New Zealand citizens (unless they hold joint citizenship or Australian permanent residency) must pay upfront and receive no discount. Permanent residents must apply for citizenship by their third year to be entitled for HECS deferral in the third and all further years.
Students must begin repaying a deferred HELP debt when their annual income reaches $36,185 (as of 2005) at a rate of 4% of annual income rising to 8% for those earning $67,200 or over. Students will have to pay a percentage of their income according to how much they earn. This percentage is taken out via the income tax system, with most ordinary employees paying through the PAYG system. Voluntary repayments of $500 or more receive a 10% bonus.
HECS becomes HECS-HELP: changes to the system in 2005
As of 2005, the Howard government have deregulated university fees. HECS-HELP (formerly HECS) maintains the same principles of HECS, however have since undergone major changes. The deregulation of university fees permits universities to increase tuition costs for university places (by a maximum of 25%). If a student receives a HECS-HELP loan, the Australian Federal Government pays the loan amount directly to the higher education provider on behalf of the student. "HECS" now refers to pre-2005 debt, and HECS-HELP refers to debt from 2005 onwards.
This deregulation of HECS-HELP has also resulted in a limit in the number of years a student may study in a Commonwealth Supported Place (CSP). As of 2005, all students may only study for a maximum of 8 years full-time in commonwealth supported university places (16 years part-time). This does not include any existing HECS debt (prior to 2005).
Known as Student Learning Entitlement (SLE), Students may only study in a Commonwealth Supported Place for a maximum of 7 years full time with a 1 year additional grace period (totalling 8 years). Once these SLE points are used, students are no longer entitled to CSPs, and must take either a post-graduate FEE-HELP load (if available) or undertake a FULL-FEE place.
An alternative option is FEE-HELP (formerly PELS). FEE-HELP provides eligible fee-paying students with a loan to cover their postgraduate tuition fees. This option is only available for post-graduate students attempting an eligible post-graduate course. FEE-HELP is also interest free, however it is now capped at a lifelong maximum of $50,000. Students cannot borrow any more than $50,000, even if once debt is repaid. See the official website for details (http://www.goingtouni.gov.au/Main/Quickfind/PayingForYourStudiesHELPLoans/HECSHELP.htm#1).
Once a student has used up all of their SLE points, they may only study under a FEE-HELP course (capped at $50,000) or as part of a FULL-FEE course. Full-Fee courses are relatively expensive courses where students must pay their all of their tuition costs upfront, which is a significantly larger debt than a standard HECS-HELP loan, usually taken for its lower academic entrance requirements.
FEE-HELP courses are available at a post-graduate level (and occasionally for some undergraduate FULL-FEE places) however they are not available at every institution or in every course. The only remaining option is a FULL-FEE place paid upfront.
Once students have used all of their SLE points, students however cannot enroll in an undergraduate degree again unless it is a FULL-FEE place.
Related schemes
Related to HECS are:
- BOTPLS, or Bridging for Overseas-Trained Professionals Loan Scheme - now OS-HELP
- OLDPS, Open Learning Deferred Payment Scheme
- PELS, or Postgraduate Education Loan Scheme - now FEE-HELP
Sources and external links
- HECS Website (http://www.hecs.gov.au/)
- Dept. of Education, Science & Training website (http://www.dest.gov.au/)
- "International student funding comparisons: Australia and New Zealand" by Professor Nicholas Barr. The Guardian, 9 October 2001. (http://education.guardian.co.uk/Print/0,3858,4273671,00.html)
- HECS website (http://www.goingtouni.gov.au/Main/Quickfind/PayingForYourStudiesHELPLoans/HECSHELP.htm#1)