The essay is concerned about the HECS in Australia since its inception back in the year 1989. The policy was set aside to help members of the society who could not meet the payment of the fees due financial constraints connected to poor social –economical background. Though the Australian government has tried to help these students, it has been noted that this student evade paying taxes which could be used to repay the loans given unto them. For this reason the loan has been made available not only to full time students who performed well and could in turn repay the debts. The act of the students failing to pay the taxes shows that citizens fail to meet their obligation as citizens. Due to the need to provide these loans tax burden in turn is increased to the tax payers who look for ways to evade taxes
The policy was set up back in the year 1989 with an aim to help the less unfortunate students get access to the tertiary education. It was set up by the Hawke government with greater contribution of the economist lecturer based at the Australian national university Bruce chapman, and championed by the minister of education John Dawkins. Before it inception there has been student funding which has been in a controversial position not only in Australia but also in the other countries such as Norway, Canada, and United Kingdom among other countries.
Some funds have been set aside for the cost of student loan system and their families, as a result of this. Although it has of considerably been helpful to students who are eligible, risks has emerged from policy to both the student s themselves and more generally to the government as well. This tertiary financing of the student in Australia has become a topic discussed vigorously and passionately since the scheme came into its inception. According to Bruce and Chapman (2002) they have argued convincingly of it economist credentials. Apart from their increasing efforts toward the support of the policy, it has still remained to be unpopular. For instance in Lawrence (2004) has provoked the heated discussion about the idea of university education as for public good.
Although the policy of HECS could be implemented with the common good of increasing exposure and provision of the university education within the user –pay system , it has brought to attention unexpected consequences harmful to the governance of the country. At a micro level the scheme has shaping the individuals who are not willing to engage in a cooperative way with the government and to be precise; with the Australia self-assessments tax system.
Evidently, those people who have been given the HECS loan are characterized by delayed payment of the money given after their education. Moreover, there has lacked evidence of the relatively harsher attitude students to the loan and tax among the group are directly attributes to social-economics background, suggesting that it may the outcome product of the HECS policy itself.
The main aim of the policy was to ensure that all the students had an opportunity to get access to the tertiary education regardless of their social background and position of their family income. Students choose whether to pay their contribution upfront or concede it under the HECS policy. As well commonwealth provide 25% discount to the eligible students who pay upfront. If one chooses to take a loan with the commonwealth government after the defer payment and are entitled to a compulsory repay meant of the loan. The loan to common wealth is repaid after one income exceeds the minimum inception.
Since introduction , HECS debts has forced students to defer to the other investment decisions for example family commitment , house purchase among others and to engage in increased pay outside their working environments. This shows that in the recent report 20% of these loans amounting to American dollars 2.8 billion in 2004 were unlikely to be paid. Alarms had been raised that the doubtful debts of the student had increased to over 130% from the year 1996 to 2003
HECS debts have been found to be a risk factor in connection to tax compliance. These have demonstrated that tax evasion has been in a great way noticed among the graduates who carry HECS debts for their tertiary education. HECS loan has been linked with the tax evasion relying with interviews and path model that have confided the attitudes at the loan repayment, university, and discourage the provision as additional casual agents. With demographic variables being controlled in the models, but no explicit question has been raised about the intersection of the demographic and the attitudinal predictions.
As per the group rank in the society social-economic status is one of the measures where by it become the indicative which controls the level of choice or the control on one’s life. For example social options, educational and a life time idea are determined by the social economic status. Most likely the gap between in individuals and the family educational attainment and occupation reflects the difference in the career in which one aspires to join. The attitude to education which is transmitted to children by their families may reflect their willingness of their children in their education they undertake.
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In Australia department of education, training and youth affairs are used to provide the various social economic by geographical distribution. Using income and expenditure, home ownership and others assets are used to rate the social economic position which is used as s merit to the award of the loan (Anon, 2005).
The level for education also is a major concern. There is a difference in the under graduate and post graduate payment of the fees in the universities. In the 1970s commonwealth has been the only source for funding for the post graduate students. (Burke, 2003)The fund from the common wealth has declined with regard to all university income. Since all postgraduate are charged full fees, then it emerged to be that not all students have got the full capacity to pay their fees. With the fact that the common wealth funding has gradually failed to support with the funds they used to provide, in 2001 33.5% of the post graduate students were in the HECS places. This has been a drop from the figure which was encountered in 1993, which was nearly 75%.
Through researches which has been carried out it was found out that, students from rural and isolated areas enrollment was lower compared to urban students. This was happening without a clear way of the results which the student had attained. With the use demographic factors there has been consideration of the geographical location of the student. This will enable the policy of HECS to apply the equality in the provision of the funds to the student. The recipients are also students who may be having some disabilities. The policy put into consideration that students from the disabled groups do not lack their academic ability for the fact that they are disabled. Otherwise disability does not insinuate disability. The students from the non-English speaking are also put into account since they are members of minority groups. These groups are considered in the provision of these funds so as to enhance equity in the county as a whole. Native Australians are also considered in the allocation of funds (Ahmed, 2006).
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Institutions are also required to award the scholarship to students but t should be based o the merits. The merit which the institution should is based on where they draw their lines in accordance to the academic performance and potential as well as the level of disadvantage of the applicant.
Apart from the policy helping the less unfortunate members of the society, it has increasingly leaded to some of negative implications to countries economy as a whole. These negative implications include the tax evasion. The Australians taxation office has noted that over the past years, students who had benefited from the HECS has slow and indirectly through perceived injustice failed to comply with process of tax collection. Tax paying always relies on the cooperation between the offices of tax collection with an individual from which tax is being extracted from. Those people who carry HECS debts are more likely to cheat on their tax return through over claiming deductions or by not declaring all of their income (Education, 2010).
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Withholding the tax appears to be efficient in the contest of the administration point of view but the effectiveness can be undermined by an individual who may be looking for opportunities to run away from the system control. In order to ensure fairness, there is supposed to have a mediator between the HECS debt holders and the tax collecting offices. Tax evasion turns out to be negative implication because those who were given debts by the government to settle their fees in the university run away with the total or part of the amount. These in turn leave the government to be in a deficit (Midap, 2004).
Some of the students who had taken HECS well less if they were feelings of satisfaction. This was in terms of the staff ability to explain the subject, provide helpful feedback, and in the provision of motivation to students. Since the students were clear with the course goals and standards, they expressed much dissatisfaction with the professional development that they accomplished through their studies.
Students who taken the HECS loans perceived the policy applied by HECS as policy which acted in an unfair way compared to students who never benefited from the policy. When any student was found in the state of not repaying the money by the authorities, the loan group expressed less penitence together with acknowledgement of shame and responsibility. Students with these loans often feared being caught by the tax office.
The students who tended to defer payment of the loan were mostly found to be younger, women in most cases, and are people reported to be constrained by their financial consideration as they chosen their courses as well as the university. These people had little work experience with comparison to the upfront payment group and were more likely to be fulltime student. This has a clear link that students who taken these loans were not more legible to paying their loan. To make this more efficient it was made available to the student not only those who pursued full time programs but also to part timers (Claire Houssard, 2010). In addition to this the loan became more eligible to those who did less expensive. This would make the loan to be repaid by most of the students and that which was not paid became a little bit lower since it financed the less expensive courses for example Band 1 and Band 2. On the other hand students who took out a HECS loan were lesser in number compared to upfront students during graduation ceremonies. The explanation held that in turn the number of women could be less in the graduation in comparison that women earn less than men and more women took loans than men did.
Tertiary education loan has been provided to help the less economically advantaged students to attend university yet it has not produced positive displays of real citizenship. Furthermore, it is not only localized to students but also applies to the extent to tax paying which shows that most of people do evade tax .HECS uses a pay user approach to tertiary education , in return the policy makers may tend to increase the tax burden to tax payers . This increase of the tax paying makes most of the people to look for the means of evading tax imposed to them. Democracy depends on the citizens doing the right thing, the policy becomes weakens when the citizen fail to comply with obligations and commitments to comply with the law of the land.