In 1940, the Curtin Labor Government saw a need for the country to increase the number of university graduates and for more civil and military research. To do this, it dramatically increased the number of scholarships it offered to enter university and allowed women to apply for these scholarships (they were previously exclusive to men). The Menzies Liberal Government also supported and extended the ability of ordinary Australians to attend university.
In the 1960s, the Menzies Government encouraged and funded the establishment of new universities to cater for increasing demand. These universities were built in outlying suburbs and offered special research scholarships to encourage students to undertake postgraduate research studies. Many of the universities that were established under this scheme are members of Innovative Research Universities Australia.
In 1967, the Government created a category of non-university tertiary institution (called College of Advanced Education (CAE)) that would be funded by the Commonwealth. These CAEs were easier to access and cheaper to attend than the traditional university, while delivering many university-equivalent bachelor's degrees.
Whitlam's abolition of university fees
During the early 1970s, there was a significant push to make tertiary education in Australia more accessible to working and middle class Australians. The Whitlam Labor Government abolished university fees on 1 January 1974.
HECS
In 1989, the Hawke Labor Government set up the Higher Education Contributions Scheme (HECS), which was first proposed by Professor Murray Wells (The Australian, 15 April 1987, page 15) and subsequently developed by economist and lecturer at the Australian National University, Bruce Chapman and championed by Education Minister John Dawkins (see Dawkins Revolution). Under the original HECS, a $1,800 fee was charged to all university students, and the Commonwealth paid the balance. A student could defer payment of this HECS amount (in which case it was called a HECS debt) and repay the debt through the tax system, when the student's income reached a certain level. As part of the reforms, Colleges of Advanced Education entered the University sector by various means.
In 1996, the new Howard Coalition Government, while otherwise retaining the HECS system, created a three-tier HECS fee structure. Fees were charged on the basis of the perceived value of courses. Courses considered to have most likelihood of generating higher income for students in the future (e.g. Law and Medicine) were the most expensive and those least likely to generate higher income (e.g. Nursing and Arts) were the least expensive. At the same time, HECS charges increased by an average of 40%. Universities were permitted to create full-fee places on which they could charge full up-front fees to students who missed out on a HECS place (with the notable exception of medical degrees).
2005-06 reforms
In 2005 the Howard Government permitted universities to increase fees by a maximum of 25%.
As part of the changes, from 2007, HECS places became known as Commonwealth Supported Places (CSP). A student in a CSP is only entitled to study for a maximum of 7 years full-time (16 years part-time) at CSP rates. This is known as Student Learning Entitlement (SLE). After that period the student must take either a post-graduate FEE-HELP load (if available) or study at full-fee rates. From 1 January 2012, SLE has been abolished and students can continue to study for more than 7 years full-time or equivalent part-time in Commonwealth Supported Courses.
The HECS debt became a pre-2005 debt, while HECS-HELP referred to a post-2005 debt. HECS-HELP (formerly HECS) maintains the same principles as HECS. If a student receives a HECS-HELP loan, the Commonwealth government pays the loan amount directly to the higher education provider on behalf of the student.
An alternative option is FEE-HELP (formerly PELS) which provides eligible fee-paying students with a loan to cover their postgraduate fees. This option is only available for post-graduate students attempting an eligible post-graduate course. In 2012, the FEE-HELP lifelong limit is $89,706, and $112,134 for students studying dentistry, medicine or veterinary science.
Prior to 2012, when a student had used up SLE, he or she could enrol on a full-fee basis. Full-fee courses are relatively expensive because the student must pay the total cost or if eligible, defer the fee on FEE-HELP, resulting in a significantly larger debt than a HECS-HELP debt for the student contribution portion of a Commonwealth Supported Course.
FEE-HELP courses are available at a post-graduate level (and occasionally for some undergraduate full-fee places) however they are not available at every institution or in every course. The only remaining option is a full-fee place paid upfront.
The discount for voluntary repayments of existing HECS debt was reduced from 15% to 10% at the start of 1 January 2005.
From 1 January 2012, the voluntary repayment discount has been reduced to 5% for payments made to the ATO to reduce an existing accumulated HELP debt.
2014-2015 Proposed deregulation
During the Abbott Government, Education Minister Christopher Pyne consistently sought to fully deregulate university fees. Pyne's proposal would have allowed universities to set their own fees according to the student demand, graduates who moved offshore to start paying through the tax system.