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HELP loans to be yanked from failing students

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The federal government is proposing that university students who fail half their units will have their government-funded HELP loan withdrawn.

The proposal was announced on Thursday by education minister Dan Tehan, among a range of other changes to the Job-ready Graduates package release earlier this year.

"We don't want students taking on a study load that they can't complete, leaving them without a qualification and a large debt," says education minister Dan Tehan.

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The HECS-HELP or FEE-HELP will be withdrawn once 50% of eight or more units are failed. The student will also lose their Commonwealth Supported Place, so they'll have to cough up the full fee amount in advance if they want to continue.

"We have found cases where students with the highest levels of debt have been continuously enrolled at multiple providers at the same time, resulting in debts ranging from $220,000 up to $660,000 combined with very low pass rates - on average these students have passed just one in every five subjects they have attempted," says Tehan.

He points to an example where a student racked up a $663,000 debt after starting, but failing to finish, 44 courses from 26 providers.

Students swiftly hit back at the proposal.

"[The] announcement contributes to the rank ableism and classism we can expect from this government," says a statement from the University of Melbourne Student Union.

"Students are not failing subjects by choice - they are failing subjects because of the youth mental health crisis in this country, which has only been exacerbated by the COVID-19 pandemic."

The legislation is the latest in a series of proposed reforms rolled out by the government that aim to shore up the financial sustainability of higher education and encourage students to undertake studies that are more likely to lead to jobs.

In June, the government proposed changes that would see the cost of arts and law degrees increase 113% and 28% respectively, while the cost of maths and agriculture degrees would drop by up to 62%.

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David Thornton was a journalist at Money from September 2019 to November 2021. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
Comments
Cinzia De Luca-Grace
August 16, 2020 1.40pm

I have to say, that this article sparked so much anger in me. This is ridiculous, the HESC Debt is capped. This was the measure taken to prevent students taking on $200,000+ debts. I have a $89,000 HESC debt and it isn't through failure. I think that the government is being quite short sighted in its attempts to induce more students to study degrees in Science, Maths and Agriculture. Most students I'm guessing are replying on the HESC program to support them through whichever course they choose to study, the determining factor in whether they enter into a Maths / Science degree of an Art Degree is their foundational education and what they ultimately believe they're capable of studying successfully or what they're interested in. The government needs to look at overhauling the expectations of the curriculum outcomes for our Primary and High School students before it looks at overhauling the HESC program. Maybe actually teaching Science in Primary School will assist!