Lexi Webster
In 1974, the Whitlam Labor government abolished university fees in Australia, making tertiary education more accessible to working and middle-class Australians. This policy, which replaced the Commonwealth Scholarship Scheme, lasted for 14 years until 1989, when the Hawke Labor government introduced the Higher Education Contributions Scheme (HECS), marking the end of free university education in Australia. Initially, all degrees cost the same at $1,800 per year, but in 1996, the Howard Coalition government implemented a three-tiered fee structure, with fees based on the perceived value of courses and students' expected earnings.
| Characteristics | Values |
|---|---|
| Year university became free in Australia | 1974 |
| Year university stopped being free in Australia | 1989 |
| Government responsible for making university free | Whitlam Labor government |
| Government responsible for ending free university | Hawke Labor government |
| Scheme introduced to end free university | Higher Education Contributions Scheme (HECS) |
| Initial cost of university after HECS was introduced | $1,800 per year |
| Average student debt in Australia | $20,303 |
| Number of students with over $50,000 in debt | 150,000 |
| Average amount paid by taxpayers for university education | 57% |
| Average amount repaid by students | 43% |
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What You'll Learn
Gough Whitlam's free university education reforms
In 1974, the Whitlam Labor government abolished university fees, making tertiary education in Australia free for 15 years. This was one of the most iconic reforms of the Whitlam Government, which sought to increase equality of access to education.
The reform was driven by Australian Prime Minister Gough Whitlam's philosophy that education was a public good and the foundation of a healthy democracy. Whitlam had long been a proponent of education reform, arguing in his 1969 campaign launch that:
> "When government makes opportunities for any of the citizens, it makes them for all the citizens. We are all diminished as citizens when any of us are poor. Poverty is a national waste as well as individual waste. We are all diminished when any of us are denied proper education. The nation is the poorer – a poorer economy, a poorer civilisation, because of this human and national waste."
The abolition of university fees was particularly impactful for Australian women, who felt that free tertiary education helped them escape poverty, achieve economic mobility, and succeed professionally. Women also felt that their education allowed them to give back to their communities and contribute to social good.
The reform also had a significant cultural resonance, creating a precedent of universal access to higher education. It paved the way for fifteen years of free higher education in Australia, ending in 1989 when the Hawke Labor government introduced the Higher Education Contributions Scheme (HECS).
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The Higher Education Contributions Scheme (HECS)
In 1974, the Whitlam Labor government abolished university fees, making tertiary education in Australia accessible to working and middle-class Australians. However, this period of free education was short-lived. In 1989, the Hawke Labor government reintroduced fees for university study and established the Higher Education Contributions Scheme (HECS).
The introduction of HECS marked a significant shift in the funding of tertiary education in Australia. Under HECS, students were required to make a contribution towards the cost of their education, with the government subsidizing a portion of the fees. This contribution from students, known as the "student contribution", was based on the expected earnings following graduation rather than the actual cost of providing the course. The Higher Education Contributions Scheme (HECS) was designed to address the funding gap in the university sector, which was no longer predominantly funded by the government.
Initially, all degrees under HECS cost the same: $1,800 per year. However, in 1996, the Howard Coalition government introduced a tiered structure to the HECS fees, now referred to as HECS-HELP. The new structure set fees based on the perceived value of the courses. Courses with a higher likelihood of leading to higher-income careers, such as law and medicine, were placed in higher fee bands. Simultaneously, the overall fees also increased, with band one degrees costing $3,300 and band three degrees, such as law and accounting, priced at $5,500.
The HECS-HELP scheme allowed students to take out loans from the Australian government to cover their student contribution amount. These loans were not required to be repaid until the student's income reached a certain level. Additionally, students who paid their student contribution upfront received a 10% HECS discount between 2012 and 2017, with a higher discount of 20% offered before 2012. While HECS-HELP loans provided some financial assistance, the average university student in Australia still accumulates significant debt, with many facing debts exceeding $50,000.
The impact of HECS and its successor, HECS-HELP, has been far-reaching. It has contributed to the increasing debt burden on university students and their families. This has particularly affected women, who, on average, take two years longer to repay their HECS debts. The scheme has also influenced the accessibility and perception of various university courses, with students weighing the financial implications alongside their career aspirations.
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Student debt and repayment
University education in Australia was free from 1974 until 1989, when the Hawke Labor government introduced the Higher Education Contributions Scheme (HECS). The HECS scheme was designed to make higher education more accessible to working and middle-class Australians, with the government paying the loan amount directly to the higher education provider on behalf of the student. Under the HECS scheme, students only pay back a portion of the cost of their degree once they reach a certain salary threshold.
While the HECS scheme has been praised for making university more accessible, it has also contributed to the rising cost of higher education in Australia. In recent years, the Australian government has made several changes to the HECS fee structure, including introducing tiers that charge higher fees for courses that are perceived to have a higher likelihood of generating income for students in the future. As a result, some degrees, such as those in law and accounting, now cost significantly more than degrees in fields like education and humanities.
The average university student in Australia today will graduate with a debt of over $20,000, and the size of student debts is rapidly increasing. This has led to concerns about the burden of student debt and the potential impact on young people's financial independence. There have been calls for more government funding and better conditions for students, with some advocating for a return to free and accessible education.
Students can access financial assistance through the Higher Education Loan Programme (HELP), which replaced the HECS scheme. HELP provides Australian citizens and permanent residents with loans to cover their tertiary education fees. Qualified students may also be entitled to Youth Allowance or Austudy Payment to help with living costs while studying. Additionally, scholarships and government-subsidized training are available in certain fields.
Repayment of student debt typically begins once graduates reach a certain income threshold. The specific repayment terms may vary depending on the loan scheme and the individual's circumstances. It is important for students to understand the repayment requirements and seek financial advice if needed to manage their debt effectively.
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University funding
University education in Australia has not been free since 1989, when the Hawke Labor government introduced the Higher Education Contributions Scheme (HECS). This ended a 14-year period of free tertiary education, which began in 1974 under the Whitlam Labor government.
The Whitlam Era and Free Education
In the early 1970s, university education in Australia was largely the preserve of the wealthy. Gough Whitlam's government changed this by abolishing tuition fees and introducing free tertiary education. This was a significant shift, opening up access to university for those from working and middle-class backgrounds. The number of university enrolments increased rapidly, from 30,000 in 1950 to just under 300,000 in 1975.
Whitlam's government also passed the Student Assistance Act 1973, which provided means-tested financial assistance for tertiary students. This was a move towards universal access to higher education, with the belief that a student's merit, not their parent's wealth, should determine their educational opportunities.
The End of Free University Education
Despite the popularity of free higher education, by the late 1980s, the Hawke government sought to end it. The primary reason was the growing number of prospective students, which would place a significant burden on the budget. Additionally, it was argued that most university students came from well-off backgrounds and would earn more over their lifetime due to their degrees.
In 1989, the Hawke government introduced the Higher Education Contributions Scheme (HECS), marking the end of free university education in Australia. Initially, all degrees cost the same: $1,800 per year. However, in 1996, the Howard Coalition government introduced a three-tiered fee structure, with fees varying based on the perceived value of the course and its potential to generate higher income for students.
The Impact of Paid Education
The end of free university education has had a significant impact on students and their families. The average university student in Australia now graduates with a debt of $20,303, and around 150,000 students have debts exceeding $50,000. The shift to paid education has also impacted women, who, on average, take two years longer to repay their university debts.
Despite the costs, university education in Australia remains accessible, with a 90% chance that a person will enrol in a university course at some point in their life. The government also provides financial assistance through the Higher Education Loan Programme (HELP), scholarships, and support payments such as the Youth Allowance or Austudy Payment.
A Return to Free Education?
There are calls for a return to free university education, with some arguing that the government should invest more in education and support better conditions on campuses. However, critics argue that "free" education was never truly free and that it benefited only a select few. Instead, they advocate for a more realistic funding model that moves away from an elitist system.
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The impact on equality of access
The introduction of free university education in Australia in 1974 was intended to make tertiary education more accessible to working and middle-class Australians. While more working-class students and women attended university, free higher education did not lead to a significant shift in the demographics of university students. This was because most working-class Australians did not complete high school, so university was not an option for them. Additionally, about 80% of students did not pay fees before the introduction of free education because their fees were covered by scholarships and subsidies.
The abolition of university fees in 1974 was not without criticism. The Australian Union of Students lobbied for fees to be retained, arguing that making higher education free would redistribute resources to those who did not need them. In the final year of "free" education in 1989, only 382,725 undergraduate students were enrolled in universities because that was the limit of the federal government's funding capacity. Universities were able to select the brightest students for their small intake, leading to accusations of elitism.
The reintroduction of university fees in 1989 by the Hawke Labor government was partly justified by the need to redress the 'skewed social mix' of higher education. The Higher Education Contributions Scheme (HECS) was introduced, with all degrees initially costing $1,800 a year. In 1996, the Howard Coalition government brought in three-tiered rates, with fees ranging from $2,454 for band one degrees to $5,500 for band three degrees. The rates were based on the perceived value of the courses and the expected earnings of graduates.
The impact of the reintroduction of university fees on equality of access to higher education is complex. On the one hand, the number of students enrolling in universities has increased significantly, including many overseas students paying full fees upfront. This suggests that the reintroduction of fees has not been a barrier to accessing university for a substantial number of students. Additionally, the HECS-HELP loan scheme allows eligible students to obtain loans from the government to cover their fees, which can be paid back once they reach a certain salary threshold.
On the other hand, the average university student now graduates with over $20,000 in debt, and the size of student debts is rapidly increasing. There are concerns that high debt levels may disproportionately affect women, who take longer to pay off their debts. The financial burden of university fees and the prospect of debt may deter some students from lower socioeconomic backgrounds from pursuing tertiary education, especially those who are already underrepresented in higher education.
While some argue that higher education should be free again, others believe that it is important to strike a balance between accessibility and realistic funding of higher education. The debate around the impact of university fees on equality of access continues, with calls for increased government funding and better conditions for students to ensure that tertiary education is accessible to all who desire it.
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Frequently asked questions
University stopped being free in Australia in 1989, when the Hawke Labor government introduced the Higher Education Contributions Scheme (HECS).
University was free in Australia from 1974 to 1989. The Whitlam Labor government abolished university fees in 1974 to make tertiary education more accessible to working and middle-class Australians.
The Higher Education Contributions Scheme (HECS) was a scheme introduced by the Hawke Labor government in 1989 to reintroduce fees for university study. The scheme initially set all degrees at a flat fee of $1,800 a year.
Today, a university student in Australia will end up on average $20,303 in debt. Students pay nothing upfront, with the taxpayer paying 57% of the cost of their degree. Students pay back the remaining 43% of the cost of their degree to the taxpayer only when they reach a salary of $53,345.
