Research to examine expanding HECS

Tweaks to the nation’s higher education contribution scheme (HECS) could improve student outcomes, researchers say. Extending HECS to cover living costs and offering the scheme to international students is the subject of new research at the Australian National University. HECS architect Professor Bruce Chapman, who is director of policy impact in the ANU’s Crawford School of Economics and Government, will start the research project this month alongside Dr Glenn Withers, outgoing chief executive of Universities Australia, who is returning to the ANU. “Most countries have student loans that cover income support as well as tuition,” Chapman told CR. “HECS was designed to cover tuition costs but there are many possibilities of extending the system that will cost taxpayers close to nothing and will make the university experience better and easier for students.” Professor Bruce Chapman For example, using HECS to cover upfront payments of $1000 a year for textbooks would help reduce financial pressures on students, Chapman said. Withers said the researchers would investigate the exact costs and benefits of a more innovative HECS program and recommend a cap for living costs. The main motivation was to limit the hours students needed to work outside university to pay their way — especially students from non-traditional backgrounds who may be more economically disadvantaged. “They work very hard in a whole lot of jobs not necessarily linked to university work,” Withers said. “The research to date shows that just the extra capacity to add $3000 to $5000 to your HECS would reduce that market work — in everything from McDonald’s to petrol stations — in ways that would allow your completion rates and your grades to increase substantially.” HECS is not an option at all for the tens of thousands of international students who attend Australian institutions. Perhaps it should be, said Withers, who is dedicated to that part of the research project. He said most international students here necessarily came from middle-class backgrounds, “because that’s the only way they can afford to pay our fees”. However, Australia could reach out to less affluent overseas students through changes to HECS. “The way to make international education more equitable, without it becoming totally aid-funded, is to extend HECS to international students and to find mechanisms whereby the payments can be guaranteed to be repaid,” Withers said. “There’s high potential here,” he added. “The group of us want to try to document absolutely how this would operate, how the legalities of it would operate in tax structures across the globe, to make sure of the conditions that would apply, so it was not abused, but funded itself in the same way HECS does in Australia.” Chapman said HECS repayments, of which about 15 to 20 per cent of recipients did not or could not make, were an obvious concern for government. “You’ve got to take it into account by focusing a little on the surcharge involved or some sort of interest rate on the debt…” he said. “But if you lose 15 to 20 per cent of the outlay, that doesn’t seem to me to be a big cost.” Chapman noted many Australian social scientists had worked on ways to extend HECS, leading to its adaptation for post-graduates and private institutions in recent years. He said allowing TAFE students to access HECS was another natural progression of the scheme, although more institutional reform was required first. “I’ve been saying for about 150 million years that there’s nothing special about university education which suits an income-contingent loan like HECS. [It could apply to] any post-compulsory schooling with fees involved,” Chapman said. The ANU research will be conducted in partnership with Universities Australia and Durakiji Pundit University in Thailand. The other participating researchers are Dilaka Lapapithat, Tim Higgins, Kianthanian Lounkaew and Mathias Sinning from the ANU and Tim Sealey of Universities Australia. The work will be funded by a three-year Australian Research Council linkage grant of $400,000.