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Friday, 10 May 1985
Page: 1783

(Question No. 141)

Senator McIntosh asked the Minister for Education, upon notice, on 26 March 1985:

(1) Under the revised arrangements for the residential subsidy for higher education students, due to begin in 1985, has the Government transformed the system of grants to students, via residential colleges, by imposing a mandatory limit of 10 per cent of the available money as able to be granted to students.

(2) Does the Government expect universities and colleges to bear the administrative costs of the scheme within existing budgets, raising the threat of students paying for these costs through higher interest rates on the loans.

(3) Does the Government expect tertiary institutions to maintain the real value of the funds, raising the possibility of debt collectors pursuing the needy students the revised scheme is designed to aid.

(4) Has the Australian Vice-Chancellors Committee determined to resist the scheme on the basis that it is unworkable.

Senator Ryan —The answer to the honourable senator's question is as follows:

(1) The Government has replaced the previous system of grants to students with a new scheme of loans and grants which unlike the previous subsidies directs assistance to students on the basis of need. The guidelines for the new special assistance for students indicate that in exceptional circumstances special grants can be justified and that these should not exceed 10 per cent of the total assistance to be made available in any year.

(2) The guidelines for the special assistance make it quite clear that the funds provided are not to be used for administrative purposes. Many institutions already operate schemes of loans and grants for students and the established mechanisms for conducting these schemes should assist in the operation of the new scheme.

The Government considers that if any additional administrative costs are incurred, they should be borne by the institutions so that students should not be required to meet such costs through higher interest rates on loans or any other means.

(3) Tertiary institutions are required to maintain the real value of funds. However, the guidelines make it quite clear that concessional interest rates are to apply thereby allowing students to benefit from loans at less than commercial rates of interest. In cases of particular need the scheme allows for the provision of grants. The administrative policy adopted by institutions in instances where defaults occur is a matter for the institutions themselves, however, as the scheme is designed to assist needy students it would be expected that institutions would apply terms and conditions that are appropriate to individual students' needs.

(4) I am unaware of any determination by the Australian Vice-Chancellors Committee to resist this scheme. However, I have already announced that it will be reviewed during its first year of operation and this will provide an opportunity for all interested groups to bring forward any views in the light of their experience with the scheme.