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Nelson admits full fee degrees out of reach of ordinary Australians.



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Media Release

Jenny Macklin MP Deputy Federal Labor Leader Shadow Minister for Employment, Education & Training Federal Member for Jagajaga

4 August 2004

Nelson admits full fee degrees out of reach of ordinary Australians

The Minister for Education, Brendan Nelson, today agreed that there was no way ordinary families could pay full fees costing as much as $210,000 to put their children through university.

On Melbourne ABC radio, Brendan Nelson said that the architect of HECS, Prof Bruce Chapman, was right to claim that the Government’s higher education changes favoured the rich.

Speaking at Monash University, Prof Chapman last night estimated that one in ten Australian students will be paying full fees as high as $210,000 by 2008 and that “unless you’ve got rich and generous parents you are in trouble”.

On the ABC, Brendan Nelson confirmed that he “did medicine at a time when there was no HECS, there were no full fee paying places for Australians, there was nothing like that.”

He agreed that it was “absolutely right” when the interviewer said that under the Nelson system “someone ...who can just write out a cheque because Daddy has got the money in the bank buys that place and that is not fair.”

Brendan Nelson also agreed that it was unfair that one in ten Australian students could be buying degrees for as much as $210,000 if the Howard Government wins the next election.

Jon Faine: Well don’t you think it’s fair that anyone from any family no matter what their capacity to pay but just on their sheer ability should have an equal chance?

Brendan Nelson: Well the situation in theory, you are right.

Labor believes that access to university should be based on ability, not on the wealth and generosity of parents.

Labor will create 20,000 extra places every year and abolish full fee degrees costing as much as $210,000.

A transcript of Brendan Nelson’s interview with Jon Faine on ABC radio 774 is attached.

More info: Caroline Turnour 02 62774045 or 0408 473 278

TRANSCRIPT BRENDAN NELSON INTERVIEW - ABC MELBOURNE WITH JON FAINE

4 AUGUST 2004

E & OE - PROOF ONLY

Subject: Monash seminar Higher education in an election year and Professor Bruce Chapman’s criticisms of full fee degrees costing more than $200,000

Jon Faine: Last night Monash University conducted a seminar called ‘Higher Education in an Election Year’. One of the speakers was the man who is described as the architect of the HECS system, Bruce Chapman. He is quoted in the papers this morning as having said that the system that he helped create is not working the way he wanted it to. He says that “unless you have got rich and generous parents you are in trouble”. He is an economist from the ANU and undoubtedly his remarks are going to attract some attention.

Dr Brendan Nelson is the Federal Education Minister who is in charge of the reforms to the HECS scheme that have attracted this criticism. Dr Nelson, good morning.

Dr Brendan Nelson: Good morning, Jon.

Faine: The man responsible for introducing student loans says the way the system is evolving and where you are taking it is only going to help rich students, students from rich families, is he right?

Nelson: Well in fact Professor Chapman is right, but the interpretation of what he is saying is in fact a little bit incorrect. Professor Chapman is one of the people who designed the HECS program and what he is referring to in this context Jon are the full fee paying students, these are the Australian students. So at the same time that we expand the number of HECS places in Australia, by 2,600 for example in Victoria, in addition to that, in addition to that there are Australian

students who are academically eligible, who missed the HECS cut off which can be as high as 99.4 and then the university says ‘Look if you would like to be a full fee paying student you can but those students of course don’t get a taxpayer subsidy, they have to pay their full way in. The problem with the current situation, Jon, is that if you are offered a full fee paying place unless you come from a well off family you can’t afford to get it.

Faine: No you can’t. So what happened to the level playing field? What happened to everyone being treated equally regardless of their wealth?

Nelson: Well one of the aspects of the reforms to higher education is that in addition to expanding HECS places and so on. We are for the first time introducing a loan scheme, we’re calling it FEE-HELP, for the full fee paying students, [tape break] poor denied the choice of being able to take one up simply because you don’t have the money.

Professor Chapman’s argument, which he is concerned about, he is not opposed to the loan scheme, what he is opposed to is the fact that it is capped at $50,000 ...

Faine: And lots of courses cost far more than that.

Nelson: Well in fact we have got 784 courses in Australian unis which charge or offer full fee paying places to Australians, we have got about 16 of those courses that have fees of around $100,000 or more, needless to say veterinary science, dentistry and so on.

Faine: Medicine?

Nelson: Well Medicine not yet, but that’s coming in, and we know that Notre Dame will be about $125,000 and we have heard that Melbourne will be about $200,000.

Faine: Now there is no way that an ordinary Australian family can afford to put a kid through one of those courses is there?

Nelson: Well in fact you are right in the sense that the fee paying loan that we are introducing will cover the vast majority of full fee paying courses but Professor Chapman and others are saying to me ‘well look you need to raise the level of that loan’, in other words for medicine, law, veterinary science and dentistry for example, that minority of full fee paying courses, Professor Chapman is saying that we the Government should be prepared to lend those students whatever the cost of that course is. And he is also saying that we should have price fixing, that we should put a cap on the level of fees that are charged to full fee paying Australians.

Faine: Well, are you going to?

Nelson: Well it is one of the things that I would be prepared to consider, it is interesting when we went through the reforms of higher education, which Professor Chapman strongly supported by the way in terms of the HECS changes and the changes to the repayment level at which HECS is paid back through the tax system. He also supported this loan scheme for the full fee paying Australians, but apart from him there was virtually no one that was saying to us ‘well look you should be prepared to offer higher levels of money to that minority of students that are full fee paying students, particularly in these kinds of courses’. Now if the university sector, if Professor Chapman and people generally say to me ‘well look we think the government should be prepared to offer a higher level of funding for kids doing veterinary science, dentistry and so on’ well then certainly that is something that I would be prepared to consider.

Faine: Well let’s look at some of the fundamental principles Dr Nelson. Did you come from a rich family?

Nelson: Arr, no I certainly didn’t.

Faine: You got a medical degree?

Nelson: Yes, I did medicine at a time when there was no HECS, there were no full fee paying places for Australians, there was nothing like that.

Faine: Well don’t you think it’s fair that anyone from any family no matter what their capacity to pay but just on their sheer ability should have an equal chance?

Nelson: Well the situation in theory, you are right. The situation we have got at the moment Jon is 15 per cent of people who get a HECS place actually have a lower academic score than the cut off for HECS, for example Melbourne University said that next year 20 per cent of the people that get a HECS place will have had an academic entry score below the HECS cut off because they have been educated in difficult circumstances and so on. My argument in relation to the fee paying students, now these are the students that say get 99 but they have missed out on the HECS cut off, so the uni says, ‘right we will offer you a full fee paying place’. At the moment, this is one of the things I was determined to change, at the moment if you are offered a full fee paying place and you come from a poor family you might as well be offered a ticket to Mars. So what I have said is OK, we will introduce a fee system, like HECS where you only pay it back if and when you are working above $35,000, we are charging a flat amount of money, no more than 20 per cent for the entire life of that loan whether it takes you five or fifty years to pay it back and what that does is open up choices to kids who do come from poor families. What Professor Chapman is concerned about is that where as the vast majority of full fee paying courses cost less than $50,000, he is concerned about a young person who comes from a

poor, a regional, a rural community, the outer suburbs of Melbourne who is offered a place in vet science, and I have had a letter from a [tape break] regional Victoria wrote to me in February 2002 Jon and she said I am a sole parent, I

have got two kids, the elder of the two girls has wanted to vet since she was two she worked her tail off, did exceedingly well at school, missed out on vet science, did a science degree at Melbourne Uni …

Faine: … still wants to get into vet science.

Nelson: … still wants to get into vet science. There were no drop outs or failures in vet science, so the uni offered her a full fee paying place. The mother took a second mortgage on the house for the first year, to help the kid do vet science in the first year and I said by the time I get through these reforms I am going to make sure there is some kind of financial assistance for you.

Faine: And for every anecdote of that kind, Dr Nelson the other flip side of the coin is you have got some rich family putting their kid through, buying a degree which that child otherwise would never be eligible to even do, let alone succeed at and that is an impression surely that you don’t want to give further credence to in a very crowded university system.

Nelson: Well the situation we have got at the moment is that for those students, let’s say take law at Melbourne Uni, the cut off is 99.4. Let’s say you get 99.3, you miss out on a HECS place, whether you are rich or poor the university will offer you a full fee paying place, at the moment, until our reforms start next year, if you are poor, you are just as likely to say ‘I can’t afford it, love to do it’. So instead you take up a HECS place in a uni you don’t want to be at.

Faine: And someone else who can just write out a cheque …

Nelson: Exactly!

Faine: … because Daddy has got the money in the bank …

Nelson: Exactly!

Faine: … buys that place and that is not fair.

Nelson: You are absolutely right Jon. And that is what I have sought to change by saying to students, ‘right, we the taxpayer we will lend you that money you missed out on a HECS place but you are still smart, you can do the course, we will lend you the money, you only pay it back if and when you are working’. Professor Chapman’s concern, which I think has got legitimacy, is that in those small number of courses that cost more than $50,000, he is saying we should be

lending more. And if I could just introduce another dimension to this debate …

Faine: Finally.

Nelson: … why should Australian students have less access and opportunity in their own universities than international students? The Opposition’s solution to this, you know what there solution to this is … it is to ban Australians … we wouldn’t even be having this discussion because they are saying ‘if you are an Australian student you will not even be offered a full fee paying place, if you

missed out on a HECS place’.

Faine: Well that is part of a global solution, but rather than getting into that debate, which I hope we have when the official, formal election campaign is underway, Dr Nelson, we just wanted today to get your reaction to Professor Chapman’s criticisms and I am grateful to you for them this morning.

Nelson: And I think they are valid.

Faine: Dr Brendan Nelson, the Education Minister in the Federal Government.

ENDS