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HECS helps millions to access university.



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MEDIA RELEASE

HECS HELPS MILLIONS TO ACCESS UNIVERSITY

5 March, 2003 MIN 296/03

Almost 2 million students have been assisted to access university study through the Higher Education Contribution Scheme (HECS).

New data from The Australian Taxation Office (ATO) has revealed that more than 1.7 million people have taken advantage of the interest-free loan scheme since it was introduced by Labor in 1989.

More than 600,000 people have already repaid their loan.

The data (attached) shows that 1,077,675 people currently have a HECS loan. Australian taxpayers are carrying the cost of these loans, which is currently around $9 billion but is forecast to rise to $11.5 billion by 2006 as more people take up loans, including through the Postgraduate Education Loan Scheme (PELS).

The Commonwealth Government willingly carries the burden of this debt at a cost of around $300 million a year in discounts, write-downs and unpaid debts - to ensure that higher education HECS places are ‘free at the point of education’.

Taxpayers contribute about 75% of students’ course costs. Students pay around 25% of the cost, for which they are provided an interest-free loan from the Government through HECS.

Students have the option of paying their 25% contribution upfront with a discount or deferring their contribution until they have the financial capacity to repay. Students are not required to repay their loan until their income reaches the minimum threshold of $24,365.

Around 90% owe less than $16,000 and around 80% owe less than $12,000. The average HECS debt is about $8,000. Only 4% owe more than $20,000.

HECS is recognised internationally as an equitable way to provide access to higher

education.

In the past decade the number of Australians with university qualifications has increased from 10% to 18% of the population.

The private benefits of higher education are significant. The average lifetime earnings of people with a bachelor degree are around $500,000 more than for those who do not have a university qualification. More than 80% of university graduates who were available for full-time employment in 2002 had a job within four months of completing their degree and the median starting salary for a graduate is $35,000.

For further information:

Dr Nelson’s Office:

Yaron Finkelstein

0414 927 663

MEDIA RELEASE

HECS HELPS MILLIONS TO ACCESS UNIVERSITY (attachment)

5 March, 2003 MIN 296b/03

range of loan balances

total number of people with a

HECS debt (from 1989 to

2002) %

cumulative %

These years only include students who incurred no further HECS debt after that year- that is they either completed their studies or withdrew from their course and have not undertaken any further HECS-liable study since that time.

2002 figures appear greater

as the count is more inclusive

- see note

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002#

$1 000 and under 61,797 5.88 5.88 3,025 2,400 2,514 2,621 2,626 3,316 3,784 4,521 4,593 4,401 3,698 3,714 4,981 15,603

$1 000.01 to $2 000 84,418 10.42 16.3 3,204 2,963 3,109 3,149 3,294 4,410 5,079 5,902 6,090 5,963 5,169 5,048 6,743 24,295

$2 000.01 to $4 000 168,658 16.43 32.73 2,871 4,296 4,911 5,321 5,796 6,895 8,117 9,585 12,694 12,833 10,907 10,380 12,858 61,194

$4 000.01 to $6 000 157,530 12.92 45.65 8 2,693 3,244 4,129 4,789 5,534 6,480 7,728 10,854 13,483 11,595 9,128 10,462 67,403

$6 000.01 to $8 000 121,763 12.22 57.87 - 90 2,840 3,492 3,806 4,386 4,977 6,067 8,033 11,935 13,545 8,918 8,739 44,935

$8 000.01 to $10 000 115,035 10.63 68.5 - 1 421 2,028 3,506 4,275 4,748 5,675 7,321 10,136 13,973 11,094 9,106 42,751

$10 000.01 to $12 000 111,714 9.33 77.83 - - 6 832 1,862 2,527 3,245 3,725 4,937 6,817 12,135 13,472 12,925 49,231

$12 000.01 to $14 000 72,099 7.52 85.35 - - - 34 435 942 1,423 1,848 2,476 3,451 6,829 12,098 11,298 31,265

$14 000.01 to $16 000 70,481 5.42 90.77 - - - 2 62 291 491 790 1,270 1,805 3,925 9,727 14,162 37,956

$16 000.01 to $18 000 38,755 3.49 94.26 - - - - 4 60 171 260 471 784 1,659 4,955 8,324 22,067

$18 000.01 to $20 000 26,082 2.26 96.52 - - - - - 4 33 99 180 373 713 3,436 5,623 15,621

$20 000.01 to $30 000 45,731 3.28 99.8 - - - - - 2 9 42 77 239 596 3,017 9,950 31,799

$30 000.01 to $40 000 3,474 0.20 99.99 - - - - - - - - 1 1 29 161 462 2,820

$40 000.01 to $50 000 129 0.01 100 - - - - - - - - - - - - 16 113

Over 9 0.00 100 - - - - - - - - - - - 1 - 8

$50 000

total HECS debtors 1,077,675 100 9,108 12,443 17,045 21,608 26,180 32,642 38,557 46,242 58,997 72,221 84,773 95,149 115,649 447,061

Note: The 2002 figures include both commencing and continuing students (the continuing students include those who completed or withdrew in that year). Therefore, the figures in the 2002 column are greater as they represent the remaining students with a HECS debt.

For further information:

Dr Nelson’s Office: Yaron Finkelstein 0414 927 663