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Cost of studying

Imagine having to choose between food and study? Critics claim that for many students, this is a reality.

Submitted 7/10/2007 By Meli Views 55061 Comments 6 Updated 11/11/2008

Photographer : Jisc Infonet

What is the issue?

It’s often said that students are the future of the nation! The Australian government claims that financial support for Australian students is ‘among the most generous in the world’. Recently, this has taken the form of the new HELP program, as well as funding of campus infrastructure. Despite this, reports show that many students are struggling financially (scrimping, saving and living off two minute noodles), and that not enough is being done.

Who does it affect?

Many university students (full-time, part-time, undergraduate and postgraduate) are finding that their ability to pay their way through university has become a nail biting experience. The ‘Australian University Student Finances 2006’ study (carried out by the Centre for the Study of Higher Education) shows that full-time undergraduate females and Indigenous students are the most affected. The study also shows that the situation has worsened since 2000, and students now have to get by with less. For example, more students are taking out loans, the number of which has at least doubled since 2000 (10.7% to 24.4%).

What support is there?

LOAN SCHEMES

Commonwealth supported places (previously known as HECS)

This is when the government pays for part of a student’s education. The amount the student pays (student contribution) depends on what they are studying and the university they attend. Find out who can apply.

HECS-HELP

This system allows students in Commonwealth supported places to either:

pay their student contribution up front and get a 20% discount (for payments of $500 or more)
put off payments until they are working and re-pay their HECS-HELP loan through the tax system.

FEE-HELP assistance (previously known as PELS)

This system helps postgraduate and undergraduate fee paying students pay their loans. Eligible students can pay part of the fees directly to the university, and pay the rest later (through the tax system).

GOVERNMENT ASSISTANCE

Government supported systems (like AUSTUDY and Youth Allowance) provide financial support for full-time students with low incomes. Basically, AUSTUDY looks after independent students (aged twenty-five years and over) and Youth Allowance takes care of those aged sixteen to twenty-four. Students can receive anywhere from $190.50 to $456.00 per fortnight, but this depends on their circumstances (so a single parent would receive more than a person aged under eighteen years).

ABSTUDY provides income support for Indigenous Australian students. To apply, students must be fourteen years or over, but there is no cut off age. ABSTUDY caters to students studying part or full-time. Students can receive anywhere from $26.20 to $382.80 per fortnight.

To keep the system fair, students receiving government support undergo income and asset tests. So students who earn over a certain amount (for example, $236 fortnightly) may have their income support cut back (by 50 cents per dollar).

So, what’s the problem?

According to the 2006 study, students are struggling financially because of rising university fees, the high costs of study, increases in the cost of university services, and inadequate government support.

Government funded income support has decreased and disadvantaged students are feeling the brunt of this. Although there is now greater demand for government aid, the number of students getting AUSTUDY or Youth Allowance has fallen 6.4% since 1998. One student claims: ‘It is very difficult to make ends meet on Centrelink alone’ (male, full-time undergraduate student, 2006).

A number of benefits which ABSTUDY provided to disadvantaged Indigenous students (like relief for those studying off campus) have also been limited or removed since 2000. Research from Deakin University predicted that these changes will disadvantage 94.3% of Indigenous students.

Many students find that high study expenses pose another problem, especially the cost of text books (which are difficult to buy second-hand because new editions are regularly released). Representatives from various student unions have also commented that inflation in areas such as parking, housing and photocopying, add up to a hefty fee at the end of the day!

What are the effects?

‘Money given to students is simply not enough to meet the demands of every day life. This creates much anxiety and stress, which in turn affects our ability to focus wholly on our studies’ — Indigenous female, full-time, undergraduate student, 2006.

Between throwing all-nighters and serving tables, students are often failing to juggle their study priorities with their working lives. More than one in five students skip classes because of demanding work commitments and this causes their university performance to suffer. Even more startlingly, one in eight students (one in four Indigenous students) are doing it tough to the extent that they regularly go without food and other basic supplies!

To deal with rising university fees, the average student invests a lot of time in paid work. Over a third of full-time students are working at least 13 hours per week, with Indigenous students having to work three hours more on average. This means little time to let your hair down and just chillax.

Then there are the emotional costs. An increasing number of students rely on family and friends for non-cash support, (when it comes to things like food, accommodation and child care) and many experience shame and humiliation because of this. Over half of all the students surveyed reported ‘great anxiety’ over the massive amount of debt the Commonwealth Supported system will leave them in once they’ve graduated. On the other hand, many students believe that study ‘wouldn’t be possible’ without the Commonwealth Supported Places.

On top of all of these immediate worries, students are leaving university faced with the reality of paying back a huge debt to the government. In 2005, figures suggested that up to one third of students would never be able to repay their debt in full. This prevents graduates from getting other loans, such as a mortgage on a property.
What is being done about it?

The ‘Kevin ‘07’ campaign made some big promises about improving the lives of students and young workers, but relatively few changes have been included in the 2008-09 budget. The number of Commonwealth Scholarships will increase from 8,500 to 12,900 and this figure is supposed to rise to 88,000 by 2012 – we’ll have to keep an aye out for those extra 75, 000! The government is also reducing the cost of Maths and Science degrees, and providing more Commonwealth supported places in nursing and early childhood education.One new initiative is that teachers who work in regional or remote areas for more than 5 years can apply to have their HELP loan reduced by up to half.

On the other hand, the Rudd government has reintroduced a $250 union fee to help cover the cost of student services. Student life can be very tough – but Rudd’s youth focused policy agenda should (in theory) help ease the stress over the next few years.

This page was updated by kate elise

How do I know this?

Alexander, C 2007, 'Students struggle with debt and hunger', The Canberra Times, http://canberra.yourguide.com.au/detail.asp? class=news&subclass=general&story_id=564791&category =General

Australian Government 2006, Higher Education, Department of Education, Science and Training, http://www.dest.gov.au/sectors/higher_education/default.htm

Australian Government 2006, Our Universities: Backing Australia’s Future – Reforms, http://www.backingaustraliasfuture.gov.au/reforms.htm

Australian Vice Chancellor’s Committee 2007, Australian Student Finances Survey 2006 Report, http://www.avcc.edu.au/documents/publications/policy/survey
/AUSF -Report-2006.pdf

Beazley, K & Macklin, J 2006, White Paper on University Reform, http://eherald.alp.org.au/articles/0706/23-01.php

Burke, Kelly, 2007, ‘University students face life of debt’ Sydney Morning Herald, 8 September http://www.smh.com.au/news/national/university-students-face-life-of-debt/2005/09/07/1125772584479.html

Centrelink 2007, ABSTUDY, http://www.centrelink.gov.au/internet/internet.nsf/
payments /abstudy.htm

Centrelink 2007, How much Austudy do I get?, http://www.centrelink.gov.au/internet/internet.nsf/payments/
pay_how_aus.htm

Centrelink 2007, How much Youth Allowance do I get?, http://www.centrelink.gov.au/internet/internet.nsf/payments/
pay_how_yal.htm

Centrelink, 2007, Payments while you are studying or training, http://www.centrelink.gov.au/internet/internet.nsf/individuals/st_payments.htm
Department of Education, Science and Training 2005, Want to know about the changes to HECS and PELS?, http://www.goingtouni.gov.au/NR/rdonlyres/833E6C74-1D77-4088-ABA2-5B39647F1734/0/pre2005_brochure.pdf

Edwards, H 2007, 'Sneaky uni fees to hit students in hip pocket', Sydney Morning Herald, http://www.smh.com.au/news/national/sneaky-uni-fees-to-hit-students-in-hip-pocket/2007/01/13/1168105230348.html

‘Going to uni: higher education for students in Australia’ www.goingtouni.gov.au

Greg McConville, 2002, Regional agreements, higher education and representations of Indigenous Australian Reality, http://www.treaty.murdoch.edu.au/Conference%20Papers/Greg%20McConville%20-%20Regional%20agreements,%20higher%20education%20conf%20Paper.htm

JessB, 2007, 'Budget Spending 07/08: Education', ActNow, http://www.actnow.com.au/Tool/Budget_Spending_0708_ Education.aspx

JessB, 2007, 'Budget Spending 07/08: Income/Student Support', ActNow, http://www.actnow.com.au/Tool/Budget_ Spending_0708_IncomeStudent_Support.aspx

The University of New South Wales,2007, Commonwealth Support & HECS-HELP, https://my.unsw.edu.au/student/fees/Hecs.html #CommonwealthSupportedPlaces

UTS 2007, 'Higher education in the limelight:’ U, 5 March, p. 3.

This work is licenced under an Attribution-NonCommercial-ShareAlike licence.
© 2008. First published on actnow.com.au

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AndreaL7 27-Jul-2008

I have to say this was an interesting read. Coming from Canada and having never experienced the Australian school system until this year, I have definately experienced a huge eye opener. This country is expensive in more ways than one. As an international student, the tuition fees and additional costs like transportation in NSW and living expenses are enough to bury a person 10 feet under.

It is true, as pointed out by Rach, that most middle class American/ Canadian families start a trust fund in their children's names from the moment they are born in order to be able to pay for their education needs in the future. This is a very taxing endeavour on any family with more than one child. Even one child can cost an arm and a leg, especially if they choose University over college and continue their studies past their undergraduate degrees. Because of this basic reality, most students end up with a debt anyways, even if their parents have been saving for years. And with every five years comes an increase in tuition costs and protests on parliament hill by students who are just trying to get a good education. Is this fair? Of course not- but its reality back home.

The HELP program is something that I think North American governments and educational advisors could look at as a benefit. Not having to pay back a loan until you have full time work and or having it come out as a tax deduction is a great idea. That way you can still live a normal life without having to worry about paying off a huge lump sum right away, or having to continuously set aside money to pay off the interest on that loan. I was lucky enough to get an undergraduate degree without having to take out a loan- working full time, over 40 hrs in the summer and with my parents assistance. However, I am now paying for my masters and when I get home I have to immediately start paying the interest on this loan- job or no job- its my responsibility. And from the way the Canadian economy is going, things are not looking up for me come Jan. I wish our educational assistance was like Australia's- it would make my life a little less stressful!

Rach 12-Sep-2007

Granted, the cost of University is extemely expensive but the HECS and FEE-HELP schemes allow people from all backgounds to be able to study. Consider somewhere like the US - one of the richest nations in the world - where families start saving for college funds from the moment children are born. Tertiary education is often in excess of $100,000 and their culture encourages on-campus living, which is an additional cost and added financial burden for students and their families.

However, as Meli said, just becasue we have one of the better University schemes in place, doesn't mean there isn't room for improvement...

One University issue that I struggle with is the first-class treatment for fee-paying students. I understand that International students pay a lot higher fees than local HECS or fee-paying students and that their contribution to our Universities is vital for economic and also multi-cultural/social reasons, and my issue does not lie with them. My issue stems from the fact that people can miss out on the UAI cut-offs and then pay their fees up-front and be allowed into the course. For some extremely competitive courses, the up-front fee reduces the UAI requirements SIGNIFICANTLY and encourages the "money talks" behaviour of some upper class societies.

The problem with this, is that the greater number of spots taken up by fee-paying students results in a lesser number of spots for HECS students and incidentally increases the UAI for future years' students. It's just not a fair system...

Philippa Hansen 11-Sep-2007

Hey Mel,
A great read as always with your stuff. I think one of the issues for students as I have found is doing what you need to to live, what you have to to study and still having enough to have an enriching life as well.
I for one still pay VSU as that $50 per semester pays for things I may need that would cost me a lot more if I had to go find it myself.
Also the just getting by thing is awfully hard when you have the stresses of bills, rents and fees going up but the centrelink payments don't reflect that.
Next year I will be doing a post grad that although not covered by HECS will be covered by FEES HELP. I'm glad that there will be a way to pay for this $12,000 course that otherwise I could not afford especially when food and lighting is on my mind!

Meli 19-Jul-2007

Wow what a reply. Thanks for giving me some food for thought!

I said the ‘Survey of Student Finances’ will address the HECS debt issue, not necessarily fix it ;)
Fixing it depends on how the Labor party decides to act after they’ve analysed the results. It’s a start though. And I agree that not having to repay HECS until you earn over $35K is an improvement.

How can students benefit from paying more for their education (which means sacrificing in other areas)? That doesn’t make any sense to me. Economics kind of goes over my head, so maybe there’s a good reason, but I can’t imagine it.

I agree that students who don’t use the VSU benefit from not having to pay. But what about students who can no longer use the services they rely on because funding has decreased so much?

Student costs have gone up, but not only because of your reason (new luxuries). They’ve also gone up for things like parking and photo-copying (not really luxurious).

It’s interesting to read what you wrote about TAFE fees, I didn’t know that. But the reason tafe fees aren’t discussed in my report is because it’s specifically about university students.

And I agree, our education system is a lot better than in other countries. That doesn’t mean there isn’t room for improvement! :)

funnelweb 11-Jul-2007

Meli, you make some great points, but I'd like to make a few comments. When Labor was last in power, HECS fees had to be repaid the very moment a student commenced employment. Under the new rules, nothing needs to be repaid until the student is earning over $35k (indexed annually), which is basically an interest free loan - with the option of voluntary repayment with a 10-20% discount! Also students who work in a field related to their study may claim on their tax return their education related expenses.

You imply a 'survey of student finances' would fix this? Perhaps students would be inclined to increase their expenses if this means to increase their benefit? So I challenge the argument that students are suffering financially due to higher fees. (That students are better off is supported by Herald writer Ross Gittins Jan 25, 2006) Before VSU, if a student did not pay their compulsory $450 upfront on the day of enrolment, the student would be denied their right to an education. Now, this fee is no longer compulsory so students can save if student unionism is not for them. The only real cost is transport and books.

Transport has continued to rise. I understand the NSW Government plans to increase fares by $3 (see Telegraph June 28) and reduce the weekly concessions. Many students have been late to exams due to the unacceptable lateness of the public transport system we've become so accustomed to. The costs of books continue to rise, but at least inflation is 2.5%, when ALP was last in power inflation was 5.2% (more than double). I acknowledge student costs have gone up, since students today have expenses that 10years ago many did not i.e. broadband, 3G mobile phones, iPods, Wireless iMacs etc. Hard to pay for all those luxuries on AUSTUDY which is designed to assist paying for the bare necessities including food, basic rent (don't forget Rentstart) transport etc.

More students than ever before go to University. The demand is almost unprecedented, and in some ways irrational since the labour shortages in Australia are around trades i.e. carpenters, plumbers, electricians etc which, on average, actually earn more than the oversupplied solicitors, accountants and computer technicians. Now, you might be interested to know in the NSW Budget of 2003, the NSW ALP government trebled the costs of TAFE fees, which, unlike University, are not eligible to be deferred and must be paid in full in advance. I do not see anything in your report discussing TAFE fees.

Keeping HECS constant means imposing a greater share of the costs on taxpayers. University administration costs rise and those costs must be passed on. I was recently speaking with an American friend who said she's incredibly jealous of Australia's most generous tertiary education system. Lowering fees and increasing AUSTUDY means the Australian taxpayer, many of whom may have no interest in attending University, will be burdened by increased taxation to meet the increased demand. According to Treasury, a significant proportion of HECS debt is actually never repaid. In Australia, a graduate student is able to relocate offshore and never repay a cent. In most countries, this practice is prohibited and must continue to be repaid attracting market rates of interest.

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