I also have difficulty seeing the first benefit you list as being a benefit. I don't have a problem with people pursuing degrees in fields that aren't big money makers, but I also don't know that the government should be in the business of incentivising people to study in these fields.

On the other hand, there is societal benefit to these fields being pursued in general. And the market economy may not adequately pay for the benefits it receives. As a society we wouldn't want everyone to major in poetry, though.

It's actually one of the best things about the system. Maybe you want to be a social worker who will never earn much but will make a meaningful difference in peoples lives, or a lawyer that only works for non-profits, or a doctor that only works for doctors without borders, or any one of ten thousand other examples where a person can make an extremely valuable contribution to society, but doesn't earn a ton of money.

You made the mistake of assuming that only people earning a ton of money make valuable contributions to a society.

Option #2: higher-paid job. Have to pay back loan, which might be a problem if you're just at the bottom of the "you have to pay it back" scale. May have your own apartment or possibly a house, savings, hopefully good health insurance, etc.

I've worked with people who would choose option #1 permanently. Their life was outside their work. They started thinking about the job when they clocked in and stopped when they clocked out. Most of them didn't go to college.

Others did go to college and graduated but didn't know what they wanted to do with their lives. Having the equivalent of a gap year or two (or ten!) after college without worrying about loan payments doesn't seem like the worst thing in the world.

You make no repayments below 50k but it when it kicks in starting at 50k it's something like 1.5% of income, with increments as you earn more. Combined with the fact that it's (1) real-interest free, (2) payments are collected by the Tax Office and automatically added on to your tax bill, and (3) Australia is really expensive, there's not much incentive to stay below 50k just to avoid paying it. Historically there have also been large discounts (10-20%) just for voluntarily paying it early too.

That's interesting. So do you want government to only fund the vocational courses and allow the rich class to be the torch bearer in research, art, and culture because only they can afford it?

I'm not seeing the downside of only the rich being able to understand how Post-Impressionists like Suerat were different from Impressionists like Renoir.

You are picking the edge case here. Art and culture are much more then just rich class's pretense.

As far as wasting money is concerned, spending it just to create more replaceable cogs for capitalistic profit seeker is also a wasteful exercise. Why not ask the Industry to invest in producing those cogs and let government think the long term by focusing on things which cannot be measured in next quarter.

Why Government should subsidize the Industry?

I'm all for long-term investments, but can these ever be measured? If not, it will take more than your claims to convince me that it's worth investing in.

There are other ways to appreciate art and culture, such as visiting museums, reading books, watching documentaries or other youtube videos on these topics, etc. These are all free or much cheaper than a course in a college. You haven't demonstrated how an academic setting is better and worth the cost.

Govt doesn't need to subsidise industry. I'd be fine if these loans are issued by private investors, as with Lambda school.

> capitalistic profit seeker is also a wasteful exercise

No, their benefit can be measured in GDP. Imperfect, sure, but 100x better than your hand-waving claims. No personal offence intended.

Academics is necessary to teach people how to create, understand and appreciate Art and Culture. People writing books (not necessarily, but most probably) have a degree in Language and Literature, people creating documentaries have a degree in Film-making etc. If you think these skills can be obtained from reading books, watching videos on YouTube etc, then the same thing can be said about STEM fields as well.

Any evidence in favor of that claim?

> If you think these skills can be obtained from reading books

I didn't say that nobody should study these fields; just that they needn't do so on taxpayer money.

Some Universities have Arts appreciation course for non-arts students who are interested in knowing, understanding and appreciating Art.

>just that they needn't do so on taxpayer money

May I know the rationale behind this? If I understand correctly, what you're trying to say is that letting people study these subjects on taxpayers money is a waste of public money, which I think is not true. There are people with Academic arts background who have contributed to the society. Even (for the sake of argument) if these are not economically rewarding areas of study, is it justified that the whole field of arts which has been there almost since the beginning of mankind to be not funded by the government just because the system under which we currently live doesn't find it profitable? Is it justified to deny access to an entire group of people who are interested to study Arts but they can't because they don't have the money to pursue it?.

I was saying that govt should perhaps not give subsidised loans to individuals (as in the Australian example) to study things like art because:

- the subsidised loan program needs to have a positive measurable ROI for it to continue. Otherwise, the next govt may bring it to an end, because there are hundreds of projects competing for government resources.

- in a world where poverty still exists, programs that are more bang for the buck may have the maximum positive impact on people. I live in India where millions are poor. Some amount of money should definitely be spent on arts / culture, but probably 100x more should be spent on pulling people out of poverty, and the way to do that is to identify high ROI investments in people.

- there are already other venues than Australian-type student loans for govts to subsidise arts / culture-type education, like university grants.

- I'm not sure about the ethics of giving a loan to a student for a course that may not pay back financially, but the loan will with the student for life, even if payment is delayed till his income increases. If arts are considered important to society, is it ethical to burden a student with the loan?

It was just a thought. I'm not adamant about it. I'm happy to see that we've had a good exchange of views, which is supposed to be the purpose of a forum like this.

Thanks for sending the link to the OECD report. I'll read it when I'm free to learn more about this topic.

And who becomes incharge of those museums? Who makes those documentaries and those books?

Once you earn over the threshold your HELP repayments apply to your entire income. So, yes, at low incomes you get a pretty significant tax increase when you cross the threshold. I think they should make it marginal like regular income tax is...

https://www.studyassist.gov.au/paying-back-your-loan/loan-re...

That only makes sense if its not implemented like taxes are. For example if when you exceed 50k and your repayment rate for the first 10k of income past 50k is 2%, and you earn 59k, you would take home $58,820. Why would you not want to take home this extra income.

Is of course is assuming it works like taxes in the US (which it probably does). The same kind of bad logic occurs in the US when people won't take a raise because they don't want to "jump tax brackets", but they don't realize you only pay the higher bracket rate on the income that was in that bracket!

The repayment scheme is stupid.

I understand your problem with the first benefit I have listed. Here are a few things to consider though:

1. Should a student be penalised for not making the best degree choice (most doing so at the age of 18 or so)?

2. Even if the degree choice is perfect for them (in a potentially risky profession), should one not be allowed to give it a go?

3. In university you see many students who have graduated, started working, decided they hated their profession, and then subsequently returned to university to reskill. Rising debt interest would have prevented many of these students from taking the new risk of changing industries. The threshold allows people to re-enter education without being drowned by their payments for the duration fo their degrees.

I agree with you that the arts are an important part of society. However, I don't believe that, given the chance, absolutely everyone would pursue them fully. I believe those who do embark on the potentially risky career of the arts should be allowed and supported to do so, as well as being able to change career paths if they so need.

[1] https://www.studyassist.gov.au/paying-back-your-loan/loan-re...

> https://www.ato.gov.au/Individuals/Study-and-training-suppor...

So yes, it is stepped, and no, there is no incentive for staying below that threshold.

re: your second point, there is no 'incentive' to study in those fields, it is merely possible to do so. It is good, as fields that are low-earning like literature and art; are not reserved only to people in society who have parents with disposable income. It's an egalitarian policy, more in line with Australian cultural values than American.

re your third paragraph: indeed. The result of our system however is that the vast majority of students major in commerce & science; perhaps because the incentive of a lucrative career is enough to stop everyone pursuing arts.

[1] https://www.studyassist.gov.au/paying-back-your-loan/loan-re...

At this point they've lost those 4 years of their life, end up with unreliable sources income (gig economy, part time work, borrow from family, etc), they're bogged down with crippling debt, and the world tells them it's their own fault. They even feel deep down that it is their fault, but now they're resentful and bitter because they're suffering despite that they had been working hard just doing what they were told to do all along.

With this proposed kind of loan forgiveness, the years are still lost to them but at least they're not crippled with debt as they try to get out of the hole they've found themselves in.

I also think a system like this incentivizes universities to help students make money and be productive after college. Under the current system, schools will shake down anybody for what money they can get. If tuition is based on future earnings, the university is going to try to get the student to make as much money as they possibly can.

In fact, this system would likely swing the pendulum so far the other direction that it might kill colleges of art and literature because they would suddenly be deemed unprofitable to the university.

This "businessification" of university education is an extremely new thing. I know you didn't intend it this way but that comment in a way hits me like when the music industry was trying to claim that piracy would kill music. We could pass a law that any and all music could be copied indefinitely and for free which would indeed kill the music as a mass industry, but music would undoubtedly continue to thrive. We just wouldn't have so many Justin Biebers or Britney Spears. Darn.

And so too for education. Get rid of systems which motivate profit driven education (which is no longer an issue just at universities which are overtly for profit), and you don't destroy education - you destroy the artificial facade masquerading as education.

Most people will probably earn over the minimum HELP repayment barrier over their lifetime and if they don't then I don't think they should be saddled with debt.

As a student you give your tax number to the university, and then the loan repayments are handled by the tax system when you do your regular annual tax return.

The system looks good on paper. It reminds me of a type of public housing offered that allows you to give 30% of gross wages. Many people stop working completely and get welfare/assistance (to qualify you need to be working or getting a regular cheque) or delay raises, etc because the less you make the less you pay. The more you make the more taxes you pay so it creates a situation where the harder you work the less you make unless you can get a huge pay increase and leave. It creates a trap.. there is a huge fear of leaving because you will never get back in.

I like the free if you qualify German model but even that has problems.

The current HELP/HECS system doesn't just work on paper. It's been used successfully for a while.

Remember, we are about repayments starting at 2% at 50k AUD (35K USD) and going up to 8% at $107+ AUD (77k USD). This is not a crazy, crippling payment. It is not worth making substantially less in your job in order to save such (relatively) small sums.

Australia is not a welfare state. We rank 5th in economic freedom [1] (USA is at 18). While the nation does have many problems, I do believe that Australia performs decently at balancing a free market and government support. While we used to have completely free universities, I believe that the current loan program is a decent midpoint between the US and European systems.

[1] https://www.heritage.org/index/

There is also a contingency plan for students who come from families with a household income of R600,000(USD 43,000) per annum.

Was this with room and board? FWIW, there are many college degrees in the USA that are in the $7k/yr range, and many of then were around $20k total prior to the last round of state-level austerity in the USA.

Getting a US college degree for under $20k is still very possible if you a) commute and b) do the first two years at a community college (typically closer to $2k/yr, or $18k-$21k for 2 years cc + 2 years state college).

With a bit more public subsidy (or differently targeted subsidy), many US colleges could be well within the $20k USD range for commuting students. And some courses of study already are.

In terms cost, UNSW is one of the top universities in the country. (EDIT: this is an ambiguous sentence, I am sorry. I mean that UNSW is one of the top universities, and cost is still lower than many US universities) I understand that US college can be done on the cheap, but it's definitely not the norm. You can always find work arounds I'm sure, but I was just emphaising that going to a top uni for this price sans-hassle is very much the norm here.

On top of this, it's important to note that even minimum wage jobs here pay pretty well (the highest by buying power in the world [2]). Thus, even if you are doing university and working part time you can do ok.

[1] https://www.humanservices.gov.au/individuals/subjects/paymen... [2] https://money.cnn.com/interactive/economy/top-10-national-mi...

This is certainly the major difference.

So no matter which university you go to you'll be paying the same "Commonwealth supported place" rate for your field of study. For engineering it's $9185/yr for what's usually a 4-year degree. [0]

Postgraduate study is strange because some universities charge full-fee, some offer commonwealth supported places for certain degrees, and some offer CSP as scholarships. My masters degree at UNSW for example was commonwealth supported so I only ended up adding $8k onto my loan for it.

[0] https://www.studyassist.gov.au/help-loans-commonwealth-suppo...