Is the Minister for Education, Christopher Pyne, having a lend when he reckons it's fair to pay over $500,000 for the same degree he got for free, asks Luke Sulzberger.
OUR CURRENT Minister for Education, Christopher Pyne, has justified a deregulation of university course fees and the introduction of up to 6 per cent interest on these new debts with the argument that university graduates earn on average 75 per cent more than their non-university educated cohort.
By Pyne's reckoning, they should, therefore, shoulder the cost of education.
What Pyne hasn’t told us is, for some, this means lifelong debts totalling over $500,000 for the same degree he received for free.
The ear-marked deregulation will see Australian students pay at least as much as currently paid by international full-fee students according to Grattan Institute Higher Education program director Andrew Norton.
The Australian Financial Review’s Tim Dodd said that “prestige” degrees of Law and Medicine would see up to a 300 per cent increase. This is backed by modelling provided by the National Tertiary Education Union.
Cartoon by John Graham
Time for a maths lesson, Mr Pyne:
Today, a University of Sydney combined Law/Science degree for a full-fee paying (non-HECS) student costs $195,000.
In 1989, the first HECS Law/Science degree cost $9000 (for the entire degree), indexed with CPI, payable at a 1-3 per cent of income, after income reached about $35,000 p.a.
After Howard increased the student HECS contribution, a post -1996 Law/Science degree cost from $27,500 to $45,000 (a 500 per cent increase) indexed with CPI, but now to be paid back at up to 6 per cent of income when income reaches $45,000 p.a.
A HELP-based (the system was renamed for reasons that will soon become obvious) Law/Science degree at University of Sydney costs $46,300, indexed with CPI, and payable at a rate of 4-8 per cent of income depending on income.
A post -2016 Law/Science degree at University of Sydney will most likely cost more than $195,000. It will accrue interest of up to 6 per cent p.a. regardless of whether it is even being paid back, or at what rate. Accruing 5 per cent interest and paid back at $10,800 a year would result in a whopping 12 per cent of $90,000 income.
This represents a massive 400-1,200 per cent increase in the initial HECS payback rate. Over fifty years, the student will pay $540,000 in total and be in debt for their entire working life.
What Pyne may have also conveniently missed is that this figure is an optimistic one because it doesn’t allow for the graduate to experience a few months where they are out of high income work let alone months, or years off to have a child. And heaven help any student who drops out mid-degree or can only find low income work. The debts of these students are too scary to calculate.
And yes, a law degree when Tony Abbott, Julie Bishop, Christopher Pyne attended university was FREE!
And Joe Hockey paid just $3,662 for his entire combined Arts/Law degree.
Students protest on Q&A
If the Minister for Educations believes that university graduates should pay for the opportunity to earn 75 per cent more income, surely this applies regardless of when you attended university? Lawyers who graduated with no debt, or $9,000 non-interest-bearing debt, or $60,000 debt, or a $540,000 debt, have all had the same opportunity to earn more by virtue of their education.
Why should this massive burden fall only on the current generation of students?
Would it not be more logical and efficient (not to mention fair) to increase the income tax rate of the demographic earning this “75 per cent more” to pay for the hike in education fees?
And most importantly – other than ensure future lawyers only come from one type of family – how does any of this help Australia move forward from a mineral-export-based economy to a modern technology, services and innovation-based economy?
It just doesn’t add up Mr Pyne.
Hear what Abbott & Pyne actually said below:
“no school will be worse off over the forward estimates period” and “we will make sure no school is worse off”)