Creating mayhem more fun, but revolting radicals miss serious issue

In The Australian today:
“With well-off students angrily demanding subsidies that will be paid for by taxpayers with far lower lifetime incomes, self-­interest is plainly alive and well at the nation’s universities. Good thing, too, for if competition could harness it to productive uses our aspiring Che Guevaras might get an education worth having.”

About Henry Ergas

Henry Ergas is a columnist for The Australian newspaper and the inaugural Professor of Infrastructure Economics at the SMART Infrastructure Facility at the University of Wollongong. The SMART Infrastructure Facility is a $61.8 million world-class research and training centre concerned with integrated infrastructure solutions for the future. Henry is also Senior Economic Adviser to Deloitte Australia. Prior to these concurrent roles Henry worked as a consultant economist at NECG, CRA International and Concept Economics. Henry's previous career was as an economist at the OECD in Paris, where amongst other roles he headed the Secretary-General’s Task Force on Structural Adjustment and was Counsellor for Structural Policy in the Economics Department.
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14 Responses to Creating mayhem more fun, but revolting radicals miss serious issue

  1. A Lurker

    But the reforms do not address the fundamental problem, which is that universities have no stake in whether loans are ever repaid, making the disciplines on price ­increases far too weak.

    How is it that when I get a loan from a bank, I am expected to repay it within the designated period of the loan. I have always repaid every loan I have ever taken out from a bank. It is not only courtesy for me to do so, but it is expected that I do so, and the loan paperwork that I sign states that I do so. Failure to do so has severe consequences.

    So why is it that University students can effectively take out a loan yet not suffer consequences if they do not repay it. That is not fair, nor honourable. The universities need to have more ‘skin’ in this loans game so that ‘defaulting’ students or graduates are pressured to repay these loans otherwise Universities suffer. I mean everyone else repays a loan when they deal with a bank, so why are students exempt, especially when some go onto earn big wages. Paying off of debts is part of growing up, and university students need to grow up like the rest of us had to.

    Perhaps a good incentive for students to repay debts, is to make outstanding student debts part of their debt history. So if these students or graduates want future loans from a bank to fund a house purchase or overseas trip, then they keep their financial ‘nose’ clean otherwise they might suffer a knockback.

    There must be consequences.

  2. Senile Old Guy

    Henry Ergas:

    Far from being at the heart of the professoriate’s mission, teaching undergraduates, espe­cially in introductory courses, is viewed as a miserable burden to be avoided whenever possible.

    Ergas is now stereotyping. I don’t think so, nor do most of my colleagues. And I note that Ergas, who usually provides data to support his arguments, does not do so here. I honestly didn’t bother reading the rest of the article.

  3. JohnA

    A Lurker #1310591, posted on May 19, 2014 at 6:02 am

    Perhaps a good incentive for students to repay debts, is to make outstanding student debts part of their debt history. So if these students or graduates want future loans from a bank to fund a house purchase or overseas trip, then they keep their financial ‘nose’ clean otherwise they might suffer a knockback.

    There must be consequences.

    The second leg of that trifecta requires that the rest of the lending sector also treats such a loan as an obligation, and therefore treat a default as they would any other class of loan failure.

    For now the only treatment is by proxy: a HECS/HELP loan not repaid indicates a low income, and therefore (1) reduced capacity to repay and (2) weak character trait (lack of incentive/drive/ambition to succeed)
    which comprise the two major Cs of lending – collateral being the third and least critical factor.

  4. JohnA

    Were our schools run that way, illiteracy would be rampant, innumeracy universal — and the love of learning a distant memory.

    SOG, the evidence you seek is there. Our schools are run that way, and the result is visible in the inadequate performance of the students. Illiteracy is rampant, innumeracy almost universal – watch the checkout charlies/chicks trying to make change even when the screen tells them how much to give, and see how flummoxed they get when you try to help by giving some coin to round the change up to a neat figure.

    The existence of post-tertiary professional qualification courses (for accountants see CPA Program and ICAA Chartered Accountants Program), cram courses, and private tutoring academies all attest to the weaknesses in our education facade (damn near a farrago, in fact).

    Wasn’t it Mark Twain who said “don’t let schooling interfere with your education”?

    Privatise the lot. Get governments out of education.

  5. Tel

    The universities need to have more ‘skin’ in this loans game so that ‘defaulting’ students or graduates are pressured to repay these loans otherwise Universities suffer.

    That’s not a bad idea, some of the money up front, and then the remainder paid from the government to the university as that student loan gets paid back.

  6. Tel

    Privatise the lot. Get governments out of education.

    A good student loan system works like vouchers, but if the payback to the educational institution is linked somehow to payback of the loan, probably that’s better than vouchers.

  7. Dr.Sir Fred Lenin

    Abolish subsidies to humanities,all these plastic”degrees”that serve no usefull purpose,subsidise medicineand allied courses,engineering and practical constructionand Pure science .The only arts course should be teaching,if anyone wants a mickey mouse degree let them pay.
    Ialso believe universities should bear the costs of hecs loans,its a different story when its your own money ,not the Taxpayers!

  8. Senile Old Guy

    JohnA:

    SOG, the evidence you seek is there.

    What you write has no bearing on the statement I criticised.

  9. Bern1

    JohnA
    +1
    Don”t ever try to round up with coin.Melts the brain.

  10. Dan

    Well I’m a middle-aged professional on a huge income and planning to start a law degree. To my surprise they told me I will get a CSP place if accepted. That’s a full law degree for $24,000 half of which will be picked up by the taxpayer?? As my fellow undergrads would say, WTF?

  11. mundi

    There is basically no requirement for CSP, other than to be Australian.

    I know a middle aged person on thier third degree soon to get USA citizen ship, won’t be paying back a cent, will also be cashing out thier super.

    Staying in Australia is apparently for suckers.

  12. Notafan

    I know a middle aged person on thier third degree soon to get USA citizen ship, won’t be paying back a cent, will also be cashing out thier super.

    Australia ought to do what the Kiwis do to people going to the Gold Coast for holidays that have outstanding fines, don’t let them board the plane until they pay the outstanding.

    Cash out your super but garnish the payout for all outstanding HECs.

  13. Aaron Oakley

    JohnA said

    see how flummoxed they get when you try to help by giving some coin to round the change up to a neat figure.

    This is EXACTLY what happened to me about 1 week ago.

  14. Wozzup

    “I know a middle aged person on their third degree soon to get USA citizen ship, won’t be paying back a cent, will also be cashing out their super.”

    I am certainly beginning to feel this way myself. All my life I have done the right thing and paid my taxes, worked hard and studied to get ahead – admittedly some of which was at public expense and other was privately funded. But all was the product of my effort and time. The recent revelation that fully half the households in this country get back more in services, rebates and other benefits from the government than they pay in taxes shocked me to the realization that mugs like me are simply a deep set of pockets into which bastards like Labour governments (in particular) can dip their hands at will to fund their next half arsed crazy schemes designed to little more than to get them re-elected.

    Isn’t it time we, the silent Australians marched in the streets and demanded to be heard. Isn’t it time we stood up and told these mongrels, “this far – but no further”.

    I am tired of listening to self important bastards occupying public office lecture me on why I should feel privileged to have them take my money and my earnings and my savings that I have put aside to provide for my family, for them to waste on lazy bastards who have no ambition or willingness to get off their arses to provide for themselves. People who themselves feel entitled to help themselves to the money that is the product of the sweat of my brow.

    Does anyone TRULY believe that fully half the people in this nation cannot afford to pay for themselves. I do not! if it is true then we as a nation are truly screwed. But fortunately it is not true – what is true is that too many Australians feel an entitlement to dip into the public purse at will to make their life easier. They are constantly told this is OK by governments – particularly of the left.

    Is this plain speaking too plain for this bulletin board. I hope not as I am pretty sure I am only saying what millions of people in my situation are feeling. It is high time that people like me made ourselves heard. If we do not stand up and send our message loud and clear it will be more of the same as these self serving bastards who are now pontificating about Hockey’s recent budget demand even more from us. There is never an end to this till there is no more money to be had from people like me. The only thing the left understands is more taxes, more money to spend, more and bigger and more wasteful progams for them to preside over. Until eventually people like me give up and leave the country or quit work and retire in the hope that we can get some of the action that so many other Australians are benefiting from.

    Let now one forget the old adage about socialism………………… Socialism is not about how to share what you have got with others. Its about how you make others share what they have got with you! This is so so true of the Australia of today.

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