My use of the word ‘lent’ in the chart below was disputed on Twitter, on the grounds that payments of HECS or HELP are tax levies. Although not spelled out in the Twitter comment, this point is often more than just a semantic one. It is part of a larger argument about how student/graduate-sourced funding of higher education should work.

One potential system for funding higher education is a graduate tax. The idea here is that graduates pay a proportion of their income above a threshold for a period of time after they complete their degree. With a graduate tax,  higher education is free but extra taxes are paid by financially successful graduates. The revenue could go into general government funds or be set to recover what the government thinks should be the student contribution to total higher education expenditure. But there are no specific charges for subjects or courses and there is no loan. The language of ‘lent’, ‘borrowed’ or ‘debt’ would not make sense conceptually or legally.

Veteran Labor (and current QUT) higher education policy adviser John Byron has argued for thinking about HECS in something like these terms:Read More »