Cap HELP loans to protect students from unsustainable fee increases

Tuesday 23 September 2014

The large waved Swinburne signage of the Advanced Manufacturing and Design Centre building in Hawthorn which faces East down Burwood Road.

Swinburne University of Technology has urged the Australian government to reconsider aspects of its current higher education package as part of a submission to the Senate Committee inquiring into proposed changes to higher education. 

In its submission, Swinburne has further advanced earlier calls by Vice-Chancellor Professor Linda Kristjanson to moderate likely fee increases for students by placing a 'soft cap' on lending under the Higher Education Loan Program.

The government’s decision to remove all maximum HELP borrowing limits removes one of the few levers that the Commonwealth has to exert downward pressure on price, both for Commonwealth supported places and full fee places.

Swinburne’s proposal would limit the amount a student can borrow each year towards fees in Commonwealth-subsidised course. It would also mean that providers offering degrees priced above the maximum HELP loan limit would be required to justify any additional costs to their students.

The submission argues a 'soft cap' on HELP lending is consistent with the Government’s objective to allow universities to set fees in accordance with market demand whilst also ensuring that borrowing under the HELP scheme is sustainable.

The submission, based on Swinburne’s direct experience of market-based deregulation in Victoria, also argues that any changes to higher education policy should be rolled out in stages rather than rapidly introducing more than 13 major policy changes by 1 January 2016.

Swinburne has also called on the Commonwealth to:

  • provide additional funding to the Tertiary Education Quality and Standards Agency to ensure that it is equipped to effectively regulate the competitive higher education market which the bill establishes;
  • design the new Commonwealth Scholarship Scheme to allow national pooling of funds and a simple model of distribution to eligible providers based on the number of low-SES students enrolled at each institution
  • consider the introduction of a national tuition assurance scheme for domestic students modelled on the scheme already in place to protect international students.

View a copy of Swinburne’s submission.