‘All students should get public subsidy’ – Report

All post-secondary students should be entitled to a public subsidy that would enable them to undertake tertiary studies in the vocational education and training area or in higher education, says a new report.

This would require extending Australia’s income-contingent loan scheme, widely known as HECS, to all school-leavers.

Under the scheme, guaranteed funding support for tertiary education to a particular qualification level through course subsidies and access to an income-contingent loan would be available to eligible young Australians between the ages of 18-24 years.

The loan would apply from certificate-level courses to full undergraduate and postgraduate qualifications designed for entry to professions.

Income-contingent loans

Students taking out a loan could directly enter degree courses, or transition through certificate, sub-degree, undergraduate and up to postgraduate qualifications. As with HECS, they would repay the loan via a tax surcharge once their annual income reached a certain level – currently around A$54,000 a year (US$42,000).

The report Financing tertiary education in Australia was prepared by Professor Peter Noonan and Dr Sarah Pilcher of the Mitchell Institute for Health and Education Policy at Victoria University in Melbourne.

It was launched in Melbourne on 25 February by Business Council of Australia chief executive, Jennifer Westacott.

Westacott endorsed the general thrust of the report but warned that older Australians wanting to upgrade their knowledge and skills also needed to be catered for.

"How we educate, train and retrain is going to be the absolute game changer in keeping countries, and the people within them, productive, competitive and prosperous," she said.

"I think what we all want is a system where the pathways are there for people to move seamlessly across different parts of an integrated tertiary education system.”

Noonan said the current tertiary funding system was skewed towards support for students at universities and, in many cases, vocational students were ineligible for government support, despite increases in vocational education course costs.

Stressful choices

"Some young people face very stressful choices when deciding to enrol in vocational or higher education. Often, it comes down to which one provides a level of government support and which doesn't," he said.

"In some cases, that young person can end up making an inappropriate choice because it has a level of subsidy attached to it. Even worse, they may not pursue tertiary education at all because university isn't an option and they can't afford vocational education."

Under the scheme outlined in the report, the researchers say that financial responsibility for all sub-degree and degree level qualifications, regardless of the sector in which they were delivered, would rest with the federal government.

The government would also provide income-contingent loans and income support to students on a needs basis.

Australia’s eight states and territories would then be responsible for funding certificate-level courses in public technical and further education institutions or through private providers. The courses would include apprenticeships, other forms of entry-level training, and post-trade training.

“Older learners or ineligible learners could still access subsidised qualifications at the discretion of each jurisdiction,” the report says.

It adds that the scheme would be based on a recognition of the interrelationship between the higher education and vocational education sectors.

Extend entitlement

“A clear ‘entitlement’ to public support for school education has been widely accepted policy for more than a century,” Noonan and Pilcher write.

“Now we need to extend that acceptance to tertiary education. It is here that advanced skills are formed – the kind of skills needed to effectively participate in, and contribute to Australia’s advanced dynamic, globalised economy and its changing complex and increasingly sophisticated society.”

The report says that for these reasons tertiary education should be defined as spanning certificate-level qualifications in vocational education through to postgraduate coursework qualifications in higher education.

As well as a separation in qualifications, the proposed scheme would mean a division of tertiary education funding roles and responsibilities between the federal government and the state and territory administrations.

At present, the federal government provides public support for higher education students, while the states and territories primarily fund vocational education and training.

In 2013, however, the states spent A$3.9 billion on vocational education while the federal government also allocated A$2.5 billion.