The concept of a loan is something we all deal with in our everyday lives. From loaning money to buy a house or purchasing a car to more menial things like borrowing a book, it’s intrinsic to human nature and allows our society to function effectively.
Within the terms of any loan is an expectation for repayment or compensation; a shared liability if you will, thus differentiating it from a typical donation. Just think about it: when you lend a friend a book to read, it’s in the hope they return it in due course and same condition you offered it.
But let’s say that the person you loan that book to is moving overseas next month and it’s likely you’ll never see them again. Would you hesitate to loan your book? Of course, it’s simply common sense, right? Well, over the past week, the media, along with left-wing politicians, have demonstrated that they have no concept of a loan repayment scheme or the appropriate management of taxpayer dollars.
Earlier this week, Education Minister, Dan Tehan, announced a major overhaul of the student contributions that go towards Commonwealth Supported Places at higher education institutions.
The changes included a generous reduction in required student contributions within the fields of mathematics, agriculture, teaching, nursing, science and IT. Additionally, the plan mandated an increased contribution from students studying creative arts, humanities, communications and social science subjects, with some more than doubling in price. The fee reductions will come into place immediately, whilst the fee increases will be rolled out for prospective students commencing university in 2021.
As a student infatuated with my study of economics at the University of Queensland, one would think that I would be strongly opposed to these changes, due to the increased debt that students within my field will incur upon completing their degree. But if I manage to peel through the layers of my own self-interest, some further analysis reveals the justified rationale behind this renewed scheme.
According to the Department of Education and Training, the Australian Government has a serious problem with an unpaid HECS debt. In 2009, the government was owed $17.821 billion by university students, yet under 10 years later, that number has more than tripled to $61.924 billion from roughly three million Australians. Perhaps what’s most concerning here is the trend that this data reveals. At the current rate, this number will have amounted to $100 billion by 2025, all of which impairs the government’s ability to allocate funds into other critical services that Australians rely upon. Put simply, these figures stand to affect taxpayers the most, leaving hardworking tradies to foot the bill of some edgy school-leaver who thought they’d dabble in feminist dance therapy. It’s simply bonkers.
So, like any smart loaner would, the government sought to address this problem before it began to threaten the livelihoods of other Australians. First off, in July of last year, the threshold for HECS loan repayments was lowered to those earning an annual salary of more than $45,881. At this point, graduates are asked to pay roughly $459 per year to pay off their loan, which equates to just $9 a week. In spite of this, the government saw no substantial change in the most recent year gone by.
During this time, Australia has been ravaged by worldwide trade tensions, a devastating bushfire season and the simply catastrophic COVID-19 epidemic, plunging the economy into recession and leaving lawmakers with a glaring debt issue that needed tidying up, fast. They needed an approach that would solve this mess, without removing the HECS scheme which offers opportunities to low socio-economic families who otherwise would’ve been prevented from accessing tertiary education.
A report was undertaken by Deloitte to investigate what degrees would provide graduates with the vocational skills to enter jobs that would be in plentiful supply in the future. It concluded that mathematics, agriculture, teaching, nursing, science and IT were growth and that graduates within creative arts and the humanities were comparatively far more likely to be unemployed or underemployed.
Given that a place of employment is the primary method of someone paying off a student loan, it’s abundantly clear that a significant portion of those obtaining degrees within the humanities found themselves unable to pay their dues after graduating. This is corroborated by the 2018 Graduate Outcomes Survey which found that the full-time employment rate for those in the creative arts (52.2%), psychology (60.3%) and communications (60.6%) were far lower than the average full-time employment rate for all university graduates (72.9%). All of this was determined by an independent employment report, thus dispelling the ludicrous conspiracy theory that the Coalition government have a disdain for humanities students.
Yet the uproar from the media that ensued this week, neglected to mention or reflect on these empirical findings, instead opting for powerful monologues from largely inept journalists, preaching about how their arts degree benefitted them both mentally and emotionally. It may be cringe-making to quote Ben Shapiro, but facts don’t care about your feelings and nor does the taxpaying Australian populace who are forced to bear the burden of the disproportionate number of humanities students who default on their student loans. Again, this is coming from a humanities student who is the first in his family to even attend university.
Australia needs a reality check. It’s fully understandable and commendable that people attend university to pursue the degree of their dreams with the aid of interest-free government loans, but it’s also completely rational that, in a time of harsh economic uncertainty, the government take a market-based approach to amending the HECS debt debacle as determined by an independent report. With 62% of employment growth forecasted for the degrees in which the government have lowered student contributions, it’s only logical to ensure that graduates are incentivised into fields where jobs will be in plentiful supply, even if it means disincentivising humanities subjects.
So, before you go taking economics lectures from moronic Greens senators and the breeding ground for socialist hacks that is the National Union of Students, perhaps reflect on that book for a moment. After all, if we’re able to put our own individual situations aside, we may just find that this solution is the most ethical, fair and effective approach for our nation.
Barclay McGain is a writer from the Gold Coast and University of Queensland student. He interns with the HR Nicholls Society and coordinates the Queensland branch of Students for Liberty.
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