HECS-HELP: A policy that has always struggled with fairness
A bill introduced to Federal parliament last week will cap the indexation rate for HECS at the lower of the inflation rate or the wage price index, providing relief for those seeing their debts increase by over 7% in the past year.
While welcome, this move represents the beginning, not the end, of changes required to make the HECS system more equitable. As this article from Valerie Braithwaite explains, the unfairness in the HECS system has always been present and goes beyond economic impacts.
HECS-HELP is Australia’s national student loan program to support payment of rising tertiary education fees. Once again, HECS-HELP raises its profile as a policy that is disadvantaging younger Australians. The current focus on economic unfairness is justified. But the unfairness of HECS-HELP is broader. It is simply not true that tweaking the economics will turn this always contested policy into one that is widely accepted, straightforward to administer and of national benefit.
On 26 March this year, the member for the federal electorate of Monash, Russell Broadbent, spoke passionately about the burden of HECS-HELP debts carried by those who could not pay their fees upfront. He acknowledged the advantage borne by those who did not need to go into debt for their tertiary education, particularly those with parents wealthy enough to pay fees upfront for them. Apart from escalating debt, Mr Broadbent noted the difficulties facing university students who are working and studying, paying for rent and food away from home, and how the stresses of surviving, let alone learning, proved too much for a goodly number, particularly those relocating to major cities from regional Australia. He noted that HECS-HELP debts followed women deep into their careers, and he questioned the wisdom of imposing suffocating debt on women who not only pursue careers that serve their communities, but also often carry responsibilities as primary family carers. What Russell Broadbent’s speech alludes to is the social impact of HECS-HELP that goes beyond economic impacts. Unfairness of HECS in the eyes of many Australians has never satisfactorily been put to bed.
Eliza Ahmed, Deborah Cleland and I have argued for many years that HECS-HELP is a policy that irritates rather than equalizes. Since 1989, HECS-HELP has at regular intervals ignited community disquiet over its unfairness - one group being treated differently to another, with the comparisons inter-generational, demographic, ethnic, and course-related among others. Added to this is what the social contract between government and citizen means to students and their families: what do they expect in return for the taxes they pay? Recently a political staffer said to me that it is older people who complain most about HECS. The implication was that concerns from this age group were less significant than concerns from those racking up HECS debts. In terms of the struggle to make ends meet, fair enough. But it is taxpayers’ money that enables the HECS loans scheme to operate and older taxpayers are concerned that the taxes they pay could support tertiary education for younger generations in a fairer and more socially productive way. My own preferred option for first degrees is that they are free – or with only a modest fixed contribution required to receive a tertiary education.
Eliza Ahmed and I put forward multiple reasons for this in the early 2000s. First and foremost, is the erosion of obligations of citizenship. We found empirically that having a HECS debt increased the likelihood of tax evasion and avoidance. Overclaiming work deductions and doing cash economy work gave taxpayers with a HECS debt a little boost at getting back at government for the scheme’s perceived burdens. Those with a HECS debt were less likely to report feeling guilty or ashamed should they be caught for not paying back their debt. When university had been a disappointment and/or conditions for debt payment were changed or not explained, flouting of tax laws increased.
HECS-HELP unleashes a sense of unfairness at multiple levels – with peers, teachers and families, and government. Sometimes individuals blame the debt in a fundamental way for the course their life has taken. When new graduates were asked to reflect on their experiences at university, they were acutely aware of unfairness between those with and without a HECS debt. Whether it was a question of a bunch of students not having financial security, being time poor, or unable to engage fully in university life as students, graduates with and without a debt were very conscious of where privilege lay in a system that proclaims meritocracy. It was not uncommon for those who paid upfront to be sympathetic to those who could not.
For teachers, tertiary education, like all forms of education, is about learning, doing your best and being rewarded with grades when you do well. We use the word merit in this context. Merit flags processes of teaching, learning and assessment that are fair and unfair. But perceptions of unfairness seep beyond the classroom to affect evaluation of the university experience more generally, the unfairness in HECS-HELP payments, the unfairness in how government uses HECS-HELP payments, the unfairness in how government supports education, the unfairness in what is offered in the workplace, and the unfairness in what opportunities lie ahead.
Tertiary education is an opportunity for people to change their lives. For a significant proportion of people, it is an identity-forming time. School leavers are still working out who they are and how to live a productive life. They need to be able to try things and change if it does not suit. Mature age students sometimes want to extend their qualification, but sometimes life throws a curve ball and people go back to university or to a vocational college to reinvent themselves. We can expect more of this with climate change, technological transformation, perhaps even more trade war, military conflict and epidemic disruptions. This means that treating a degree as something you buy for life makes less economic sense. It can make little sense in terms of a person’s psychological and social well-being and development over the life course.
HECS-HELP is an economic scheme that misses the mark on being responsive to the experiential side of tertiary education and the centrality of fairness in educational undertakings. That experience is initially personal, extends into other spheres of life (eg taxpaying) and then can become a collective expression of dissatisfaction when fellow travellers meet who are equally dissatisfied with some aspect of HECS-HELP. Fellow travellers can be found across the political divide and across the generations. Whether inclined to the left or right, they tend to share Mr. Broadbent’s view:
… it's important to train our population for greater productivity, greater opportunity, greater lifestyle, greater science, greater maths, greater chemistry, greater engineering, to make a greater society. That's why we invest in our students—because they can grow Australia.
When we as a nation invest, we must do it in such a way that the gift is returned with grace. That only happens if our policies are fair, not only economically, but also socially. Governments and universities would do well to stand in the shoes of their students and reflect on the fairness of the social contract they are offering.
Relevant publications can be found at: http://valeriebraithwaite.com
Moderator: Ruth Pitt