In 1940, the Curtin Labor Government saw a need for the country to increase the number of university graduates and for more civil and military research. To do this, it dramatically increased the number of scholarships it offered to enter university and allowed women to apply for these scholarships (they were previously exclusive to men). The Menzies Liberal Government also supported and extended the ability of ordinary Australians to attend university.
In the 1960s, the Menzies Government encouraged and funded the establishment of new universities to cater for increasing demand. These universities were built in outlying suburbs and offered special research scholarships to encourage students to undertake postgraduate research studies. Many of the universities that were established under this scheme are members of Innovative Research Universities Australia.
In 1967, the Government created a category of non-university tertiary institution (called College of Advanced Education (CAE)) that would be funded by the Commonwealth. These CAEs were easier to access and cheaper to attend than the traditional university, while delivering many university-equivalent bachelor's degrees.
Abolition of university fees
During the early 1970s, there was a significant push to make tertiary education in Australia more accessible to working and middle class Australians. The Whitlam Labor Government abolished university fees on 1 January 1974. By the mid-1980s, however, there was consensus between both major parties that the concept of 'free' tertiary education in Australia was untenable due to the increasing participation rate.
Introduction of HECS
In 1989, the Hawke Labor Government began gradually re-introducing fees for university study. It set up the Higher Education Contributions Scheme (HECS), which was first proposed by Professor Murray Wells and subsequently developed by economist and lecturer at the Australian National University, Bruce Chapman and championed by Education Minister John Dawkins (see Dawkins Revolution). Under the original HECS, a $1,800 fee was charged to all university students, and the Commonwealth paid the balance. A student could defer payment of this HECS amount (in which case it was called a HECS debt) and repay the debt through the tax system, when the student's income exceeds a threshold level. As part of the reforms, Colleges of Advanced Education entered the University sector by various means. The HECS system was accepted by both federal political parties and has survived until today, though with a number of changes.
Howard government reforms - 1996-2012
In 1996, the new Howard Coalition Government, while otherwise retaining the HECS system, created a three-tier HECS fee structure. Fees were charged on the basis of the perceived value of courses. Courses considered to have most likelihood of generating higher income for students in the future (e.g. Law and Medicine) were the most expensive and those least likely to generate higher income (e.g. Nursing and Arts) were the least expensive. At the same time, HECS charges increased by an average of 40%.
From 2007, HECS places became known as Commonwealth supported places (CSP). A student in a CSP was only entitled to study for a maximum of 7 years full-time (16 years part-time) at CSP rates. This was known as a student learning entitlement (SLE). After that period the student had to take either a post-graduate FEE-HELP loan (if available) or study at full-fee rates. SLE was abolished from 1 January 2012.
The HECS debt became a pre-2005 debt, while a post-2005 debt is called HECS-HELP, which operates on the same principles as HECS. If a student receives a HECS-HELP loan, the Commonwealth government pays the loan amount directly to the higher education provider on behalf of the student.
An alternative option is FEE-HELP (formerly PELS) which provides eligible fee-paying students with a loan to cover their postgraduate fees. This option is only available for post-graduate students attempting an eligible post-graduate course. In 2012, the FEE-HELP lifelong limit was $89,706, and $112,134 for students studying dentistry, medicine or veterinary science.
Prior to 2012, when a student had used up SLE, he or she could enrol on a full-fee basis. Full-fee courses are relatively expensive because the student must pay the total cost or if eligible, defer the fee on FEE-HELP, resulting in a significantly larger debt than a HECS-HELP debt for the student contribution portion of a Commonwealth supported course. From 1 January 2012, SLE was abolished and students could continue to study for more than 7 years full-time or equivalent part-time in Commonwealth supported courses. FEE-HELP courses are available at a post-graduate level (and occasionally for some undergraduate full-fee places); however, they are not available at every institution or in every course. The only remaining option is a full-fee place paid upfront.
The discount for voluntary repayments of a pre-2005 HECS debt was reduced from 15% to 10% from 1 January 2005. On 1 January 2012, the voluntary repayment discount was reduced to 5%, and was removed completely from 1 January 2017.
2017 changes
Changes to funding of universities and the HECS were made as part of the 2017 Australian federal budget. University funding is to be a reduced by 2.5%, and university fees are to go up by $2,000 to $3,600 for a four-year course, an increase of 1.8% in 2018, and 7.5% by 2022. From 1 July 2018, the income level at which HECS debt repayments start will be reduced, from $55,000 to $42,000.