Why the Government's Approach to Student Debt Doesn't Make Sense

Ellie Stephenson argues that the Government’s new debt policy doesn’t stack up.

Recently, the Federal Government announced plans to remove access to Commonwealth Supported Places and HELP loans for students who fail half of the first eight subjects in their degree. They claim this is in the interest of students: by refusing to finance failing students’ degrees, they aim to discourage those students from accumulating excessive debt by failing more subjects. Taking a closer look at the policy, it’s clear this plan is overly punitive and will target disadvantaged students. 

Your first hint that this government and its supporters don’t actually care about student debt should come from their own policy platform. The Liberal Party has been a consistent advocate for policies like fee deregulation and, most recently, raising the price of certain degrees significantly. If they wanted to avoid trapping students in large amounts of debt, surely they’d avoid more-than-doubling the cost of an Arts degree. It’s disingenuous to make education more expensive and simultaneously claim to be concerned about students’ levels of debt. 

A government which really wanted to minimise student debt could take a different path. Providing free university degrees, increasing debt forgiveness, raising the HECS repayment threshold, and making it easier to drop units after the census date would all reduce student debt to varying degrees. The government has done none of these: instead they have routinely pursued policies which make it more difficult to pay student debt back. 

This policy is also a terrible way of supporting struggling students. It misunderstands why students fail and what can help them. Obviously, no student wants to fail a unit. Using punitive disincentives to terrorise students into passing their subjects is misguided because students already have major incentives to pass. Instead, failure often occurs because of external factors like illness, poverty and work commitments. 

Some argue that students who fail as a result of these personal issues will simply receive exemptions from the policy. This dramatically over-estimates the capacity of current support systems to assist disadvantaged students. Students with disabilities frequently struggle to access Disability Services, affordable housing options are sorely limited and the University’s special considerations options are often impenetrable. All of these systemic failures, among a litany of others, mean that we cannot trust exemptions to make this policy fair. 

As a particularly depressing example, we know that students who experience sexual violence on campus are extremely likely to fail multiple units. The University has consistently failed to address sexual violence on campus, which means expecting its systems to organise exemptions for survivors is wildly unrealistic. The existing barriers to reporting sexual violence also stop survivors from accessing academic support. Punishing students financially for their trauma is utterly cruel. 

It’s obvious this system will let down students who are suffering from circumstances beyond their control. But perhaps it will help prompt students to study a more manageable workload? Again, this policy fails to recognise the structural causes of students biting off more than they can chew. People don’t simply exhaust themselves voluntarily. Being a student who lives out of home, works and studies is pretty hard; the cost of living in Sydney is prohibitively high. However, students are deterred from going part time if needed: you lose travel concessions, youth allowance and if you’re an international student there can be consequences for your visa. If the government wants to help struggling students, it should stop punishing them for cutting back their study load. 

Let’s take the best case for proponents of the policy: students who have picked the wrong degree and are struggling to complete a course they are simply not good at. Again, this completely ignores students’ existing circumstances and incentives. Why would people studying a field they struggle with and in which they probably won’t succeed continue doing so at significant personal cost and inconvenience? Neoliberals allegedly believe that individuals make rational choices based on their own preferences and incentives, but apparently that theory goes out the window at the first opportunity to punish first years for choosing the wrong degree. Perhaps more accessible university support systems which help students to change degrees and provide useful academic advice would be more helpful in this respect. 

Some of the policy’s supporters  go so far as to say students who fail half their first year units aren’t cut out for university at all. This ought to be rejected outright; students should be given the opportunity to adjust to university and overcome barriers to success, and this doesn’t always happen instantly. But even if it were true, it is rank hypocrisy for a government which has gutted TAFE to suggest students should look to gain practical skills outside university. 

At the end of the day, failing half of your units is not an outcome students want. By introducing a financial penalty for failing, the government simply piles more pressure upon students who are struggling. At its best, this policy is an unnecessary incentive for students who don’t want to fail anyway. At its twisted worst, it overwhelmingly targets students facing things like poverty, sexual violence, illness and disability. Sadly, this illogical and elitist policy is unsurprising in a context where the accessibility of tertiary education is being rapidly eroded.