Australian graduates face the nightmare of fees free-for-all

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A DECADE after Australia introduced the Higher Education Contribution Scheme (HECS) - a system of tuition fees for university students - the sticky issue of who pays how much for university education has once again hit the headlines with students occupying government buildings and the Australian government forced into a very public climb-down over fees.

A report to cabinet by education minister David Kemp proposing deregulating university fees - that is, allowing universities to charge whatever they feel appropriate for courses, and to charge students real interest rates on loans taken out to cover fees - was effectively scuppered after a leaked copy was met by protests at universities across the country.

Suggestions that graduates could end up paying A$100,000 (pounds 40,000) for a university education provoked such outrage that the Liberal government was forced into a damage-limitation exercise.

However, the proposals are just the latest in a long list of changes that have taken the HECS from a level charge for all students, as in the UK, to a differentiated system where students pay more for some courses than others. It's a long way from the decision in 1989 to introduce a student contribution to the cost of higher education. And some commentators believe that this is a path that could also be followed in the UK, which looked heavily to Australia during the Dearing review, which first proposed tuition fees for UK universities.

Today, Australian students pay A$5,682 (pounds 2,270) per year to study law or medicine compared to A$4,855 for science or A$3,409 for arts subjects. Since 1996, it has been deemed appropriate that subjects that cost more to teach, such as medicine, and which are likely to bring graduates a higher average earning potential, such as law, carry a higher HECS rate.

The differential HECS, likethe original HECS, have, according to initial reports, done little to dampen enthusiasm for higher education, or to affect the social make-up of those applying for university degree courses or the subjects they chose to study.

A recent lowering of the earning level at which graduates have to pay back HECS is likely, many believe, to be a small disincentive to part- time students, who may find they have to start paying back while still studying. However, the latest plans - though shelved for now - have sent alarm bells through the sector. Many think the issues will resurface.

Bruce Chapman, professor of economics at the Australian National University, and an architect of the original HECS, said any plans to charge real interest rates on fees would change things markedly. "It may have many parents saying to their children, `do you really want to be saddled with that kind of debt?'," he says.

Ian Dobson, associate to the Deputy vice-chancellor at Monash University, warned that real interest rates on tuition fees would mean "any woman with aspirations of motherhood would be collecting a huge debt, like a second mortgage," as interest accumulated on her student debt. Some suggest the debt could rise as much as 30 per cent during a five-year period of non-repayment.

Suggestions to open the market to allow universities to charge students whatever they wish for courses have also been fiercely opposed, with speculation that universities with the best reputations could price themselves beyond the reach of the average Australian student.