Dodging the bill !

Australia prides itself on kids getting a free education - but that only applies to primary and secondary school.   Those that go on to university find themselves accruing an education bill and there have been schemes put in place to spread the load.

HECS has been relabelled HELP and the idea is to defer payment of the university bill until the person is in employment - and reaches a salary level when automatic repayments begin. In the 2012/13 year, this repayment salary level has been set at $ 49,450. The average student can expect to leave university with a bill of between $ 20,000 and $ 30,000,

There are rumblings in the government because students now owe a whopping $ 6.2 billion - and there is little hope that much of this will actually be repaid.  The entire scheme was based on the notion that students leave university and enter the workforce here in Australia.   Those that leave the country and seek work overseas escape the repayment obligations entirely.

The government is looking at ways to extend the long arm of the tax man to recover such debts and the entire system of university fees and their recovery will be under review.

It is a complex issue.  University used to be a place for young people, but many older folk displaced from a shrinking job market have taken up university training in the hope of gaining employment opportunities.  In many cases they fail to reach the salary level for repayments - and many die leaving behind an unpaid university bill.

There are also what has been termed " professional students ".   People with an unquenchable thirst for qualifications who go on endlessly studying and never enter the workforce.  Then there are those with academic qualifications who vacate employment to marry or raise a family, and later return to the workforce in a much diminished capacity - and with earnings way below the repayment level.

It seems to be a fact of life that a proportion of HELP fees will be unrecoverable - and written off.   The dilemma for the government is to what extent is this level sustainable ?.   Funding the universities comes from the government's " consolidated revenue " account and represents a big proportion of both Federal and state budgets.   The taxpayer has a right to expect  " fair equity " in it's plan to recover fees.

There is a danger that this problem may influence the allocation of university places and decrease the opportunities for Australian students in favour of those full fee paying students from overseas countries. Australian universities have a good reputation in the fast emerging Asian countries to our north.  It would be tempting to redress the balance to achieve a better economic outcome.

This is both a " fiscal " and a " social " problem.   Solving it will be a test of our claim to be " a clever country " !