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Getting some HELP from Australia

  • 24 April 2014
  • By Libby Hackett

As Chief Executive of University Alliance I am often asked to talk about the value of higher education, why we need more graduates in the economy and the need for smart investment in teaching and research. But I don’t always get to look at the detail of how this funding should take shape.

About two years ago I began looking at the design of the student loan systems in Australia and England in more detail. Following the introduction of £9,000 fees and with growing concerns about the high levels of non-repayment of loans in the UK (currently 45%) there was obvious potential to apply some of the findings of my research. Today HEPI is publishing my research, hopefully providing a timely contribution to the debate about the future of higher education funding and student finance in the England.

Nobody is suggesting the Australian system is perfect but there are a few important lessons we can learn by looking more closely at their system. In particular, how they achieve a much higher level of repayment of student loans and how they are able to offer loans to pretty much everyone, including virtually all postgraduate and part-time students. Graduates also pay back more quickly, meaning the vast majority have paid off their student loan before the age of 30 when, typically, they will be starting to buy houses, getting married or having children.

We need to find a way to get fee loans out to postgraduate and all part-time students. In order to do so, we need to bring down the cost of loans, which means addressing the English student loan design that asks only £7.50 a week from someone earning £25,000 a year.  At this rate, no-one should be surprised that it takes over 26 years to pay back and that over 60% of students will never repay their loan in full.

Given the central importance of higher education to any modern, global economy, these are big issues and will undoubtedly form part of the election debate. Public and political discourse will focus on £9,000 fees, student debt and the 45% non-repayment of student loans but hopefully this report will contribute to the wider debate. A well-designed higher education and student finance system will be critical to the future of our economic and social prosperity as a nation; anything we can do to contribute to that is at the heart of the purpose of both the Higher Education Policy Institute and University Alliance. Further proposals for a future funding system will be published by University Alliance in June as part of our uni_funding work.


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