Recent changes to student loan and tuition-setting policies in post-secondary education : Skills Research Initiative

The theoretical discussion in the next section follows the logic of the argument presented in Chapters 10-14 of Nicholas Barr’s The Welfare State as Piggy Bank. [...] The question of whether the poor are paying for the education of the children of the rich is a long-standing empirical question in economics. [...] One response is that a lengthy repayment period is in line with the standard idea that the length of the repayment period for a loan should match the life of the asset being financed. [...] While the HEAC was only A$250, it represented the first universal higher education charge since the abolition of tuition fees in 1974.12 The major step toward using private resources to fund higher education was made in 1989 with the design and implementation of the Higher Education Contribution Scheme (HECS) which incorporated the first large-scale income-contingent loan system in the world. [...] As Chapman notes, the public discussion of the changes focused on the higher charges and the effect that they might have on the access of lower-income students.16 However, a second change, raising the first repayment threshold from about A$26,000 to about A$36,000 lowers the true cost for many former students.