Flogging a dead stay-at-home mum

Some bad ideas simply won’t die – okay bad pun – simply won’t go away. Andrew Norton has long argued against Australia’s income contingent loan scheme that part finances Australian university students. In particular, he doesn’t like the fact that outstanding HECS debts are written off at death. Last year he managed, briefly, to get former education minister Christopher Pyne to consider the idea of not writing off HECS debt upon death. Now he’s got Simon Birmingham looking at the idea.

In an address to the AFR’s Higher Education Summit, Mr Birmingham indicated he would be looking at old measures, including ending the write-off for HECS loans at death, which former education minister Christopher Pyne ruled out last year.

Grattan higher education program director Andrew Norton recommended the change last year, after analysis found debt being written off was often held by secondary income earners of wealthy households.

Many of those benefiting were women who did not work, or did not return to work fulltime after having children, because their partner was able to support them financially.

Okay so here is the story: Young lady goes to university and meets and marries a high-flyer who earns oodles of money. She raises the children and never works (or works very little) and never pays off her HECS debt. It is really hard to get excited about this issue: people who don’t work or never earn over the repayment threshold are not liable to pay back the HECS – that is a design feature of the policy not a bug. Perhaps some other features should have been included in the HECS design at the time. But as things stand the policy is working as designed and as intended.

But then we get into the “if you want to change a policy pick a big number” problem.

The Grattan Institute floated the idea last year and estimated it could bring in $800 million for the government.

I seem to recall that was $800 million per annum, but even if it wasn’t that is still a very big number.

So HECS has been around for about 25 years. Let’s assume the average outstanding HECS debt is about $20,000. Let’s also assume that people tend to go to uni between ages 18 – 21. So the oldest women with an outstanding HECS debt are going to be about 46. So $800 million by $20,000 is 40,000. Are we to believe that 40,000 university graduate stay-at-home mums die each year with an outstanding HECS loan of $20,000? Even The Lancet might blush at a death rate like that.

Perhaps 40,000 university graduates have died over the past 25 years with an outstanding HECS debt, that if recovered, would have raised $800 million. That works out to $32 million per annum – not nothing, but not much to get excited about either. But that is a very different story to recovering HECS from rich widowers and orphans.

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78 Responses to Flogging a dead stay-at-home mum

  1. Shelley

    Putting aside the content, that was seriously the best post title you could have come up with?

  2. Sinclair Davidson

    I’m open to suggestions.

  3. J-man

    If it was $800 million over the four year forward estimates period then it would be 10,000 deaths per year. Probably still too high an estimate.

  4. pete m

    Who is to say the estate could afford to pay the hecs debt anyway?

  5. .

    I don’t like university inefficiency. This is where the real savings are!

    What would courses actually cost if they were charged at transfer prices?

  6. Shelley

    Don’t want to come across as critical..just with this weird (getting weirder by the day) case in SA and NSW.

    I paid my fees as I went utilising the 25% discount for early payment. I was working full time too though. Couldnt the earnings at which the debt starts to get paid back be lowered and paid on an upward sliding scale as wages rise or career advancement?

  7. kraka

    I don’t mind the HECS loan scheme and it’s rules-its the low threshold IQ to get in that is the real problem. Dunces who cant read, write and add up properly are getting into uni to do mickey mouse courses. That’s the real fiscal issue

  8. Sinclair Davidson

    Shelley – I was think in terms of the expression flogging a dead horse.

    The SA/NSW murder case is very strange. Why nobody thought about looking for the little girl after her mother’s body was found year ago is very strange. Anyway – if you want to discuss that take it to the open thread.

  9. Talleyrand

    How about we make HECS loans a liability underwritten by the Tertiary sector. At the moment all the risk is covered by the taxpayer with no reason whatsoever for the sector to provide responsive useful degrees and relevant training.

    I imagine degrees with majors in Queer Theory, Womens Studies, Human Rights, semniotics and literary theory or circus performance, ; would have large reductions in University funding if these institutions covered the debt until their graduates repaid it.
    The establishment of recoveries against deceased estates still leaves taxpayers with debts long detatched for those decade old choices . You csn bet the divesting of estates prior to death is going to keep tax lawyers busy.

  10. GoTiges

    It is a pick a number issue as Sinc says. The level of HECs debt not expected to be repaid, is an estimate. Like all estimates, it is subject to considerable uncertainty, especially since the estimate is based on a flow model, where people are leaving (ie repaying their debts) every day to be replaced by new entrants. When calculating the total amount of HECS debt (from which the amount not expected to repaid is guessed at) assumptions are made about future income, future voluntary repayments, and the deferral subsidy which arises from indexing the outstanding debt at the rate of inflation rather than the true discount rate.
    Absolutely agree they are flogging a dead horse here. More work than it’s worth to try and untangle it. Be better if someone checked how much the universities charge for some of these courses, as someone suggested up thread. That is where the real savings would be.

  11. CameronH

    I don’t care about any of the provisions. If you incur a debt then it should be paid back. If you are a woman who marries a wealthy man man who supports you then he should pay it back for you. The paying of a debt is a moral issue. To deliberately not pay it back is theft.

  12. Jeremy

    I think Sinclair is right! No-one should have to pay any debts! Then the world would be full of pinkness and light, and everyone would be happy.

  13. Entropy

    Sure most people incurring a HaeCS debt are 18-21, but that group would be more likely to pay it off. But I can tell you that in some postgrad courses, particularly at Dawkins Unis, there are quite a lot of mature age ladies, and they are ladies, that seem to graze one course after another. They will never pay their HECs debt.

  14. cath

    “Biting the hand that feeds you” is a better title than the one you have used Sinc. If she has stayed home bringing up the kids she has worked her a*se off and not been paid for it. If she has brought up her kids successfully, they are all good little taxpayers busy producing more little taxpayers of the future. Thus she has contributed mightily to the social capital and the economic welfare of this country for no payment. In addition her high earning husband has paid a good deal of tax despite the family tax concessions (now well eroded anyway), health and other types of insurance, the family has funded schools, kept various service and retail businesses in the black, supported car dealerships and tourism providers generously on a regular basis – and they will then live of the super they have accumulated rather than relying on a pension. Well worth a piddling HECS debt being written off at her death.

  15. notafan

    What about people who move oversea and never come back?

    If people are undertaking tertiary qualifications for personal reasons (I know someone who did a second arts degree just because they could and has never worked more than 20 hours a week) then rather mess with old debt find ways to discourage people from undertaking degrees for entertainment.
    Charge upfront fees based on combined family income for example.
    I really doubt that uni then straight to a rich husband and babies is a significant demographic.
    Most would work for a few years at least especially with mortgages what they are.

  16. Pusnip

    I’m with CameronH – even if its not a lot of money in total, its right in principle. Subsidised tertiary education is already a source of inequity, benefiting the relatively smart at the expense of the academically uninterested or challenged. Writing off the debt worsens it to subsidising the unproductively smart at the expense of others.

  17. Fred

    Wait till a young father dies of cancer and his widow and children are on a current affair crying at how they have to fork over $20000 to the government for his outstanding hecs debt. The minister for education will fold like a cheap suit.

  18. Stimpson J. Cat

    I actually had a funny true story to tell based on that headline but realize it is no longer appropriate.
    Carry on.

  19. Lem

    I think Sinclair is right! No-one should have to pay any debts! Then the world would be full of pinkness and light, and everyone would be happy.

    I think Sinc was pointing out that the Grattan Institutes numbers were a gross over estimation:

    That works out to $32 million per annum – not nothing, but not much to get excited about either. But that is a very different story to recovering HECS from rich widowers and orphans.

  20. squawkbox

    I might suggest a general rule that spouses and inheritors should invariably be responsible for one’s debts. Why HECS specifically? Could it possibly be because the government is the creditor?

  21. Rafe

    Neat idea Shelly at 9.39.

  22. Rafe

    Suggestions.

    Sunk costs.

    Leave the dead and bury their debt.

    Says Law and HECS borrowing.

    Mill on Says Law and the subjection of women.

  23. Senile Old Guy

    First, the current government seems to spend large amounts of its time talking about new ways to squeeze money out of the public and no time considering reducing spending.

    Second, these are nearly all stupid ideas which will never happen. As Fred said: “Wait till a young father dies of cancer and his widow and children are on a current affair crying at how they have to fork over $20000 to the government for his outstanding HECS debt.” It would be regarded as a death tax and wouldn’t that be popular?

    Third, why would a family be responsible for a debt which was probably incurred before the person was married and the children were born? Really? Children responsible for their parents debts?

    Fourth, it’s the Grattan Institute. All they seem to do is come up with new (or often old and recycled) ideas for taking money off taxpayers.

  24. James Hargrave

    ‘I don’t like university inefficiency. This is where the real savings are!’
    Absolutely. And I am sure that my favourite university – undoubtedly the best in Parkville – will, yet again, employ expensive consultants to tell it how to save less money than it paid the consultants. The efficient university would be one where academics and students didn’t get in the way, much as station stops and passengers get in the way of running the Melbourne suburban railway system properly.

  25. Sydney Boy

    Shelley –

    I paid my fees as I went utilising the 25% discount for early payment.

    That would be nice. Except John Howard reduced the discount to 20%. Julia Gillard reduced the discount to 10% and then later removed the discount all together.

  26. Sydney Boy

    Pusnip –

    Subsidised tertiary education is already a source of inequity, benefiting the relatively smart at the expense of the academically uninterested or challenged.

    – Pretty subtle. a /sarc tag would have been appropriate!

  27. .

    Entropy
    #1841413, posted on October 29, 2015 at 10:28 pm
    Sure most people incurring a HaeCS debt are 18-21, but that group would be more likely to pay it off. But I can tell you that in some postgrad courses, particularly at Dawkins Unis, there are quite a lot of mature age ladies, and they are ladies, that seem to graze one course after another. They will never pay their HECs debt.

    I swear half of my law course is made up of bored housewives. I should have made hay at res school.

    Seriously though, they have no intention to ever practice. Good news: I have far less competition than some concern trolls on this blog tell me I do in the job market on graduation.

  28. Combine Dave

    And how about some death duties too, am I right?

    The rich dead are obviously not pulling their weight.

  29. outsider

    Back in the 80s Macquarie Uni was 50% ‘mature aged’ students. The catchment – intended to draw in disadvantaged kids from the western suburbs, instead attracted the doctors’ wives and their bozo kids living in the green leafy radius of perhaps 10 kms around the uni.

    Doing statistics, I happened into a research course (supposedly) for the social sciences (psychology) – it was filled to the brim with neurotic feministas, including the teaching staff. They all knew something was wrong with them, and were at uni to find out what it was. Average age perhaps 45 years.

    They did not look self-employed to me. They didn’t look likely to ever need to earn a quid either, the main ports of call through the week were the coffee gatherings, astrology classes and gym and hair/nails etc. I could see them resenting paying back debt of any kind, certainly not in a Whitlamesque scheme to which they were so clearly entitled.

  30. 2dogs

    I don’t mind the HECS loan scheme and it’s rules-its the low threshold IQ to get in that is the real problem. Dunces who cant read, write and add up properly are getting into uni to do mickey mouse courses. That’s the real fiscal issue

    University places, by course of study, should be funded in proportion to HECS recoveries from graduates.

  31. rebel with cause

    As Fred points out upthread, unless the Minister is prepared to collect from the estate of young mothers and fathers that die with young kids, a HECS debt, a mortgage and limited super, then this policy is going nowhere.

    It’s not rich ladies dying that would be hit by this policy, but young and middle-aged professionals with families that haven’t yet paid their HECS off.

  32. Combine Dave

    They did not look self-employed to me. They didn’t look likely to ever need to earn a quid either, the main ports of call through the week were the coffee gatherings, astrology classes and gym and hair/nails etc. I could see them resenting paying back debt of any kind, certainly not in a Whitlamesque scheme to which they were so clearly entitled.

    Upfront fees only, with exceptions made for STEM courses.

    And debts recovered not just based on private income but auto deducted from any welfare received (including pensions).

  33. 2dogs

    I think we are in agreement as to the desired effect, Combine Dave, the problem with your mechanism is the luvvie academics will invariably inveigle their way on to the board which decides what constitutes a “STEM course”.

  34. Rabz

    I’m open to suggestions.

    “Flogging a dead dingo’s donger”.

  35. notafan

    How about we go back to commonwealth scholarships.
    Then let the middle aged ladies pay for their own classes at the full fee rate.

  36. Myrddin Seren

    I am with Fred

    Wait till a young father dies of cancer and his widow and children are on a current affair crying at how they have to fork over $20000 to the government for his outstanding hecs debt. The minister for education will fold like a cheap suit.

    Most academics blogging at The Conversation could not reach the bottom of the barrel in terms of vitriol against supposed ‘hard ass’ Christopher Pyne. Who has about as hard as a week old lettuce leaf and:

    EDUCATION Minister Christopher Pyne has walked away from an election commitment to audit “ridiculous” grants by the Australian Research Council and reassign their funding, amid warnings about the politicisation of research grants.

    Now that we have moved in to the Turnbullian era of open slather budget deficits and borrowings, no minister ( from an Australian political party ) is going to play Snidley Whiplash on this thing.

  37. James

    these are nearly all stupid ideas which will never happen.

    Don’t you get the memo? Everything is on the table!

  38. Flogging a dead stay-at-home mum

    I’m open to suggestions.

    Hm. Actually the thing is a lot of people go back to uni and get degrees later in life. Someone I know has begun an intense degree – his/her fourth, BA, DipEd, RSA, DipFA, BFA, and now into B (or maybe M) Psych – that will be completed at age 60 or 61, then look for a part-time job in the field! The last three were done as part-time working person while partner earned a crackerjack salary (at least, between several intervals of unemployment).
    A number of our acquaintance have done the same thing, or come to Australia from places like Germany or Croatia where their degrees are not recognised, then completely retrained in Australia to rejoin the professional workforce.

    I suggest that its a powerful subsidy to the middle class AND to the higher education sector. However, in my circle the people are all workers – if sometimes part time or retired from successful careers – and as households all are or were strong net taxpayers, not moochers and looters like those OTHER guys/girls.

  39. dan

    I might suggest a general rule that spouses and inheritors should invariably be responsible for one’s debts.

    I’m pretty sure that debts are settled from any deceased estate. You don’t get to hand over the property to your successors while the bank loses the funds they loaned you. If the education loans were supplied by a commercial bank maybe it would be more transparent.

    It’s not just the loans that are a problem though: even people paying upfront are massively subsidized if they are in Commonwealth-supported places. As dot says, why is the government subsidizing vast numbers of middle-aged people who feel like studying law (even if they pay upfront)?

  40. Rabz

    these are nearly all stupid ideas which will never happen.

    I believe this observation has been made about many stupid ideas throughout history. Didn’t stop them happening, though.

  41. dan

    I believe this observation has been made about many stupid ideas throughout history. Didn’t stop them happening, though.

    Once marginal rates hit 95% or so, CGT is 150% of profits to discourage speculation, compulsory super contributions are 50% of salary and taxed at 100% we will probably start needing to move on to ideas like this.

  42. Rabz

    Once marginal rates hit 95% or so, CGT is 150% of profits to discourage speculation, compulsory super contributions are 50% of salary and taxed at 100%

    Dan, these are all brilliant ideas that need to happen immediately. I’ll dispatch them to the Gratton Institute, toot sweet.

  43. Mayan

    There is also the rather obvious problem that, to apply this retrospectively, would amount to a unilateral change of the terms of a contract. On the other hand, we know we can always count on the state to act in bad faith.

  44. johanna

    The structure of HECS makes it trivially easy to avoid ever repaying it.

    Option 1 – go overseas.

    Option 2 – work part-time, or a a low paid job, staying just below the repayment threshhold.

    I don’t understand why a debt to the taxpayer should treated differently from any other, including by making repayment effectively optional. The ATO doesn’t forgive debts applying to deceased estates. Why should HECS be any different?

    The worst part, as others have mentioned, is that the more useless the dgree is, the less likely the borrower is to ever have to repay it. Talk about perverse incentives.

  45. For information, every year the government includes as an expense an estimate of the amount of HELP money lent that year that will not be recovered. In recent times that has been around $1.5 billion.

    You are right that the cash that removing the death write-off will bring in each year is going to be small for a long time, given the age of most of the debtor cohort.

    The main savings are in the accounting treatment of the debt. But that is true from the savings from reducing tuition subsidies too – as the money is borrowed and not repaid for a long time, if ever.

  46. boy on a bike

    If the mums go to work and require childcare subsidies, would the subsidies they receive for putting the kids in care outweigh the HECS debt?

  47. john malpas

    This all seems just another way to make people work for the government. The day they start charging soldiers for their training – then it all might make sense.
    It is the governmnt who wants educated , literate voters. the government needs them more than they need the government.

  48. Pedro

    LOL, deficit solved.

    Still, a sensible approach would be to treat the family as a tax unit and stick HECS debts in there for both.

  49. Fleeced

    I don’t like university inefficiency. This is where the real savings are!

    As I’ve said before, make future uni funding dependant on HECS paybacks, and they might offer less useless courses.

  50. Who is to say the estate could afford to pay the hecs debt anyway?

    The threat of taking the taxpayers money might convince the deadbeats that they should pay the debt off over the years. after all, $20k over 20 years is sod all.

  51. Well worth a piddling HECS debt being written off at her death.

    No Cath. Bugger it, a debt is a debt. If due to a hardship factor the Minister responsible can write it off. That’s one of their prerogatives.

    Although uni students like to see themselves as part of the deserving poor, it’s overwhelmingly the sons and daughters of people in the upper part of the distribution of income who go to university, and do so with the goal of acquiring the qualifications that will allow them to take their own place in the upper reaches of the distribution.

    So the irony of the government’s efforts is that it’s predominantly the children of the better-off who’ll be hit by the expected significant increases in the cost of a uni education. And those increases raise the hurdle faced by those wishing to join the echelon intended to benefit most from the government’s budget reordering.

    Read more: http://www.theage.com.au/comment/hecs-debt-will-soar-but-it-remains-the-best-loan-20140603-zrw1g.html#ixzz3q0cVkZ00
    Follow us: @theage on Twitter | theageAustralia on Facebook

    …and we wonder where some of these people get their sense of entitlement.

  52. old bloke

    Hand over HECS funding to commercial lenders, the Government should not be offering loans when it knows that a large percentage will never be repaid. The borrowers should also be obliged to carry insurance to cover the loan amount.

  53. notafan

    If the government is already writing off significant amounts of HECs debts it stands to reason that the debtors are older people who have chosen to stay below the repayment threshold.
    Either collect debts from people’s estates or treat people as family units for taxation purposes.
    I don’t want to subsidise Mrs Freely-Watkins-James third degree in assessing the effects of climate change on native tussock grasses.

  54. EB

    Option 1 – go overseas.

    I thought that was off the table now for places like UK, Canada, NZ and USA? Some tax agreement?

  55. Myrddin Seren

    nota

    I don’t want to subsidise Mrs Freely-Watkins-James third degree in assessing the effects of climate change on native tussock grasses.

    If you really want to tear up – think of all the products of Australia’s finest journalism schools ( much sarc ) we are subsidising to spend their every waking moment erasing the society that has nourished them to the point where they can stand on their own two feet and destroy it.

  56. notafan

    If you really want to tear up – think of all the products of Australia’s finest journalism schools ( much sarc ) we are subsidising to spend their every waking moment erasing the society that has nourished them to the point where they can stand on their own two feet and destroy it

    Yes them and the budding primary school teachers with enter scores of 50 and the ‘Youth Workers’ also with enter scores of fifty.

    Tear water tea time, indeed.

  57. Ellen of Tasmania

    Privatise education.

    It will become cheaper for everyone. It will become obvious just what courses are good-for-nothing. It will make people think more carefully about their education choices. It will end free-loading leftist loons from brainwashing the next generation against the free capital market that is subsidising them. It will improve the quality of education. Individuals and companies can offer scholarships and incentives to encourage students to enter needed fields and promote greater competition for excellence. It will promote shorter, more focused degrees. Online learning can cut down travel, time and costs. More professions would revert to apprentice style qualifications.

    What we have now is beyond ridiculous.

  58. Ant

    “It is really hard to get excited about this issue”

    Yes, pissing money up against a wall is never exciting. Until you’re down to counting you pennies.

    Fortunately, governments never run out of money 😉

  59. Speedbox

    The ATO doesn’t forgive debts applying to deceased estates.

    True, but on the presumption that you could reasonably plan for your death (progressive fatal illness, old age etc) rather than sudden (accident), then I imagine that any tax avoider worth his salt has managed his tax affairs in such a manner that his “estate” is worthless as any assets have long since been divested to trusted family or into overseas investments and/or tax shelters.

  60. .

    Ellen of Tasmania
    #1841899, posted on October 30, 2015 at 1:22 pm
    Privatise education.

    It will become cheaper for everyone. It will become obvious just what courses are good-for-nothing. It will make people think more carefully about their education choices. It will end free-loading leftist loons from brainwashing the next generation against the free capital market that is subsidising them. It will improve the quality of education. Individuals and companies can offer scholarships and incentives to encourage students to enter needed fields and promote greater competition for excellence. It will promote shorter, more focused degrees. Online learning can cut down travel, time and costs. More professions would revert to apprentice style qualifications.

    What we have now is beyond ridiculous.

    Yes I like this.

    Law degrees as a hobby are absurd. You are spot on about efficiency and quality.

  61. .

    Ant

    Education is what I actually get animated about.

    It is an expensive, all too long and ineffective mess that is used for electoral cycle onanism.

  62. Ant

    …and indoctrination.

    On this the left never misses an opportunity. They can’t help it. Brainwashing and exploiting children is in their DNA – from the moment they’re conceived.

    If he/she survives abortion, the kid has an uphill battle to make it to adulthood without having their head filled to the brim with manure.

  63. Ant

    “It is really hard to get excited about this issue”

    Again, to elaborate, this statement is really the thinking of a member of the political/commentariat class who is invariably well remunerated (not necessarily unmerited, mind) who doesn’t come anywhere near having to count the dollars left over after paying taxes and bills to see which week is the best one to buy their kids a new pair of school shoes.

    Do the people who determine the quantity and sources of taxation ever consider – and I mean really consider at a kitchen table level – how difficult they make it for low income workers (not moochers), let alone give two stuffs about minimising waste?

  64. mundi

    It is bizarre to even talk about this, since people with hecs debt won’t be dieing en-mass for decades.

    So they are trying to lock in a measly few million per year for a governments decades in to the future?

    The whole thing seems like a huge waste of time.

  65. notafan

    Again, to elaborate, this statement is really the thinking of a member of the political/commentariat class who is invariably well remunerated (not necessarily unmerited, mind) who doesn’t come anywhere near having to count the dollars left over after paying taxes and bills to see which week is the best one to buy their kids a new pair of school shoes.

    Chucking $200 million to climate boondoggles hear, not chasing a $100 million in debt there. My kid is in her first year of working and despairs of ever buying a home but she pays her taxes and her HECs debt.

    HECS was introduced in the 80s and we have had 30 years plenty of mature aged students belting around uni campuses with no intention of ever paying HECS debts, as well as all the other problems like group assignments and mickey mouse courses.

    I agree tertiary education should be privatised. It’s grossly inefficient in so many ways.

  66. Sinclair Davidson

    Ant – There is plenty of waste to clean up before getting to recovering HECS from deceased estates.

  67. Cra

    This is almost as foolish an idea as the delusional belief that collecting HECS repayments from people who have moved overseas is viable.

  68. ar

    How many little old ladies go to uni to fulfil their dreams after their husbands kick the bucket? Local papers often carry stories like that.

  69. johanna

    Sinclair Davidson
    #1842104, posted on October 30, 2015 at 5:17 pm

    Ant – There is plenty of waste to clean up before getting to recovering HECS from deceased estates.

    Yep, there’s plenty of waste to clean up from Social Security, swimming pool providers, and people who don’t recycle as well.

    But hey, debts owed to taxpayers for degrees in tourism and gender studies should not be repaid.

  70. notafan

    I’m all for little old ladies to fulfill their dreams as long as they pay for them.
    Getting married and having a family is a choice.
    I’m a bit sick of this unfulfilled dream stuff.
    My mother trots it out about her contemporaries.
    Getting to stay at home and be a full-time mum would have been living the dream for me.

  71. Boambee John

    Make the universities liable for unpaid HECS/HELP debts – if they can’t make the students employable at a salary high enough to get the money repaid, their problem! If they accept older/elderly students who don’t have enough life expectancy to repay, their problem!

  72. Aussiepundit

    The whole thing is based on a false premise, that the typical HECs non-repayment is a form of deliberate or accidental tax avoidance.

    But the scenario of the rich wife skating through life on her husband’s income, sneakily getting away with a free education years after the fact, Ronnie Biggs style, isn’t the typical HECs non-repayment scenario.

    Often it’s just people who went through uni but who remain in lower income groups after graduating, who didn’t get ahead, never managed to get a good job, and died poor.

    So the reality of such a policy would be that you’d be merely rifling through the pockets of the poor.
    The dead poor, at that.

  73. johanna

    So the reality of such a policy would be that you’d be merely rifling through the pockets of the poor.

    No mention of the dudded taxpayers, I note, who might also be poor.

    Oh, the humanity!

  74. Aussiepundit

    No mention of the dudded taxpayers, I note, who might also be poor.

    They’re dudded by design.
    This is a loan given to anyone who wants to go to uni- unlike a standard loan, there’s no assessment of ability to pay, no time frames etc, and you don’t have to pay unless you earn above the threshold.
    If you set up such a loan system, not all loans will get repayed.
    The system is designed that way.
    The unpaid loans aren’t, and shouldn’t be, a surprise. They aren’t an inconvenient bug. They are actually a feature of the system.

    This policy is really about trying to turn the system into a different system by sleight of hand, by someone who doesn’t like its current design.

  75. cath

    Winston Smith the whole point of my comment is that she has paid her debt in kind rather than in cash.

  76. This is almost as foolish an idea as the delusional belief that collecting HECS repayments from people who have moved overseas is viable.

    They collect child support from people overseas, don’t see why HECS should be any different.

    And child support has to be paid even if your income is zero.

  77. Justin

    I haven’t read the Grattan paper but the start of the article is more about marriage, families and workforce participation rather than death rates. Albeit recovery of the monies owing occurring at death. The substance of the issue is still compelling even if the solution is not. You should have to pay for your degree irrespective of your work and income situation. That may mean extending the loan period such that cash flows don’t push people into too much hardship. However, the principle must be that people pay for the goods and services they consume. Our HECS scheme runs the same way as non-recourse home loans in the US. The no responsibility default option skews pricing and market choices. You value what you pay for. You think harder about what you consume when it is expensive. Perhaps with greater accountability people will make wiser education investment, universities will price courses properly and hopefully the junk courses will be rationalised. The system will better reflect employment needs. The answer lies in the mix of family income tested benefits or better still reform of the tax system to allow for income splitting. Eg reduction or abolition of family tax benefits or Childcare subsidies where the family income is above a certain threshold and no HECS payments are being made. Something along those lines.

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