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At what point does HECS break?

7 August 2012

At what point does HECS break?  In  response to the Grattan Institute Report Graduate Winners" the IRU argues that there are strong reasons to retain a mix of Government direct funding and Government loans to students as the main revenue sources for undergraduate higher education.

  • Increasing HECS to replace Government funding, or even half of Government funding, will push up the level of non repayment to levels that Government will find hard to accept.
  • Students being charged the full course by course cost such that they change their choice or their willingness to enroll will reduce longer term productivity, a loss not just to them but to all of us.
  • The  mix of Government funding and Government loans reflects the importance of encouraging people to gain learning and skills and the reality that extending this to the large number of people now needing higher education is too costly to be covered fully by Government funding.
  • The Report's narrow view of public gain from education misses that the capacity to earn and live well is heavily dependent on others doing so as well. The varying individual gains each contribute to, and gain from, each other.
  • The modeling in the report is of value but suffers from:

o    only considering 18 year olds and not older students and

o   not testing the counter factual of what would graduates be doing and earning if they had not undertaking a degree

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