Some thoughts on Labour’s tertiary education policy

  • I don’t get it – targeting a policy at people who are currently still at school and too young to vote without any cohesive plan to reduce debt for people with outstanding loans seems like obviously terrible politics. How could that not occur to anyone in the Labour policy development team? Whose vote is going to be mobilised or swayed by this? I can think of two groups of people: old-school socialist ideologues who are residually suspicious of the upstart Greens, and maybe some swing voting parents of today’s 13 year olds. You know what the parents of today’s 13 years old care about more than tertiary education? High school education! The people who care most about tertiary education are the people currently in tertiary education, who don’t benefit at all
  • A billion a year is a huge ongoing cost. I wonder what else you could do in the tertiary education sector for a billion a year? Universal student allowances spring to mind – the fees are annoying, but the living costs are the killer. Three years of borrowing undergrad fees could set you back around 16k, but six years of borrowing living costs could set you back around 50k. There’s also a much bigger equity issue with living costs than with fees, because the parental income threshold for allowance eligibility is fairly low. There’s a big group of people whose parents can’t afford to support them during study, and whose parents don’t live in a university town, and yet aren’t eligible for the living allowance. Also the eligibility is a yes/no thing, there’s no gradual drop off in the allowance amount. Someone who is not eligible for the allowance and whose parents can’t (or won’t) support them would easily end up with more than double the debt for the same degree as their more fortunate peers. 
  • Anyone who does a long degree, and anyone who is not eligible for the allowance and doesn’t have other funding, is still going to graduate with debt. Potentially still huge debt. And fee increases are still going to be an issue.
  • Outstanding student debt is really big! I’ve long been a fan of some sort of debt write-off scheme for people who stay in the country, because loss of skilled workers overseas continues to be a major problem. If you spent half a billion a year on debt write-offs while spending the other half billion on increased student allowance eligibility, you’d win many many many votes. And it would be a more meaningful change to the system.  
  • There are lots of areas where a big student debt makes you a bit screwed, such as buying a house (both saving a deposit and making mortgage repayments). Also in assessing eligibility for child related social support – means-tested initiatives such as working for families and the childcare subsidy are based on income before student loan repayments are deducted. This begs for some policy consideration.  
  • The exclusion for postgrad study and for people who are doing a second undergrad degree really undermines the lifetime retraining rationale. 
  • I worry that if passed, this will take the teeth out of more cohesive reform of the sector. I can picture a future where a doctor graduates with $80,000 of debt and is told not to complain because they got three years free. 
  • At the risk of being too big-picture, it seems to me that you can’t fix just one corner of one plank while the rest of the bridge is in disrepair. There needs to be a plan for the whole bridge. (The plank in this analogy is the tertiary sector, the bridge is the social welfare model. I don’t want to start comparing tertiary education to other deserving things, that’s the point of saying the whole bridge needs a fix… Weird coincidence though – a year of fulltime creche for a kid under three is about the same amount of money as three years fulltime study. Like, what? But yeah.)
  • [added later] The problem Labour identifies is that it needs to be easier to access education because a changing economy needs workers to update and/or completely change skill sets over the course of a lifetime. But three years fees-free is too small fry to get us there. Anyone with prior tertiary study is ineligible and it can only be used once per person, and it doesn’t do anything about living costs. If you’re going to be radical, then actually go the whole way: completely re-think the scheme. Make it genuinely free! (Maybe it could be free for anyone who does two years post-school public service? Maybe it could be free for anyone who stays in the country for as many years post graduation as they were enrolled in study?) Write off all debt progressively over the next 10 or 15 years! Introduce a universal student allowance with no lifetime limit and at a higher payment level! If you’re not going to that, if you’re going to make an incremental change, you should carefully consider the best use of funds – and the more I think about it, the more I reckon this is big splashy front-page news stuff but hasn’t had good poilcy work behind it.