Federal Budget Ignores FEE-HELP Gap

Nicholas Baum
Volume 3, Issue 11, (Originally Published on Monday 20 May 2013)
 
In its latest, and many predict its last, budget, the Labor federal government has reduced university funding while failing to address the FEE-HELP gap that faces many law students.
 
Discounts for students paying fees up front, which advantaged wealthier students, have been removed; start up scholarships will be replaced with income contingent loans; and universities will be subject to an ‘efficiency dividend’, taking away $902 million in expected funding over four years.
 
Funding was included, however, to support students wishing to study overseas in Asia, with $58 million being spent on overseas study help and associated programs over four years.
 
Nevertheless, the budget has not addressed the gap between funding available for students to complete courses and the cost of those courses.
 
The value of the government’s total educational loans to students is expected to grow by nearly $4 billion to $26.3 billion this year, in part because of an increase in students obtaining FEE-HELP loans.
 
FEE-HELP is a government program assisting students studying on full-fee places to defer their payments, just as HECS-HELP does for students studying on Commonwealth supported places.
 
Unlike HECS-HELP, which is uncapped, FEE-HELP debt is capped at $93,204 for 2013, up from $86,422 in 2011. The FEE-HELP limit is a lifetime limit with increases tied to inflation.
 
Currently, a place in the Melbourne JD costs a full-fee student $105,924, up from $99,466 in 2011. This leaves a gap of $12,720 that students must finance separately, assuming students do not have an existing FEE-HELP debt.
 
Some 50 per cent of JD students are full-fee students, meaning this is a problem that affects a large cohort.
 
The university provides a FEE-HELP bursary to two to three students annually of up to $10,000, an amount that does not even cover the existing gap.
 
The gap has continued to grow over the last three years, with rising fees far outpacing the indexation of the FEE-HELP program.
 
Exacerbating the problem, students wishing to be admitted to practice must also cover admission course fees of $8,070 – 8,750 within the FEE-HELP limit, if they are not able to obtain funding from an employer.
 
LSS President Pat Easton has been vocal on this issue, raising it in an interview on the ‘Survive Law’ website in March this year, and writing to federal politicians in conjunction with Emilia Maubach, a Monash JD student.
 
The LSS has established a working group to address the issue, and provided detailed information about the problem online. This move followed a petition calling for an increase collected by the LSS in 2011, signed by more than 500 students, and an article quoting Easton and former president Antony Freeman in the Australian Financial Review in February 2012.
 
Nicholas Baum