Gen United

6th Month 2024

3 minute read

Placement Poverty: Struggling students could soon be paid for placements 📚

In this blog we’ll be covering:

✏️ What is HECS

✏️ The system is broken

✏️ What’s changing to benefit you

The Albanese government is finally looking into making tertiary education more affordable for students.  Recommended changes to HECS and student placements will mean more money in the pockets of students juggling work and study. 

But first, what is HECS? Is it the same as HELP? 

HECS stands for Higher Education Contribution Scheme. It was brought in by the Hawke Labor government in 1990 to split uni fees between the government and the student. Before that – believe it or not – degrees were fully subsidised and effectively free. In 1996, the Liberal Howard government introduced tiered fees, which is why some degrees now cost more than others.  

You might also be familiar with HECS-HELP and FEE-HELP, which are basically different names for the same thing. They’re all acronyms for ways the government collects money after you’ve finished your degree. Currently, the HECS tax kicks in after you start earning over $51,550 a year. More info here.

So, what’s changing?  

An independent review panel has recommended 47 changes to increase the quality, affordability, sustainability, and accessibility of higher education. We won’t go into all of those here, but it does show that the system is in dire need of major change

In short, the recommended changes that would help students financially are: 

✏️ a change to payment rates so you can earn more before paying off debt 

✏️ changing the timing of when your debt gains interest (indexation), so it’s not tied to rapidly rising inflation 

✏️ making sure that indexation does not rise faster than wage growth 

Together these changes would ensure that student debt doesn’t spiral out of control just because economic conditions are bad. 

Another important recommendation that’s been a long time coming is funding student placements. 

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