Labor plans loans for vocational courses

HUNDREDS of thousands of students in the vocational education system will be offered HECS-style government loans under a Labor plan.

HUNDREDS of thousands of students in the vocational education system will be offered HECS-style government loans to cover their course costs under a Labor plan to boost skills training.

The new scheme, which will be put to the Council of Australian Governments meeting in March, will extend a version of the existing university-based higher education contribution scheme to students studying a trade or technical skill.

Under HECS, introduced in 1989, the commonwealth pays students' study fees to course providers and recoups the debt through the tax system once individuals are in the workforce.

"Labor will make it easier to get a trade, to improve skills," Julia Gillard writes in The Australian today. "We will ensure these students have the same right to borrow so they can study, to get a loan that they can pay back from increased earnings.

"The more determined have always made their way. Now we're going to make it much easier for them, and for others, who have been put off by the upfront costs."

At present, vocational education students studying for higher-level qualifications have access to the FEE Help federal loan system, which attracts a 20 per cent fee. The system is popular with training students, with total student debts increasing from less than $500,000 in 2007 to $110 million last year.

The Prime Minister's office was unable to confirm last night whether all students working towards training qualifications would qualify for the new arrangement, but extending loans to all certificate and diploma students would more than double the number of Canberra's student debtors.

Last year, 850,000 Australians were studying HECS-eligible university courses. The commonwealth now has $18 billion in outstanding student loans on its books.

The plan is likely to be popular with the states. While course fees in the training system are generally much lower than those charged by universities, in the absence of a tight cap on course costs, a universal loan system will increase commonwealth funding to the states to cover student fees.

The new scheme will also address criticisms of the existing loan system that a flat fee loan would discourage students contemplating lower-level training courses.

Canberra also faces a funding challenge at the other end of the education system, with calls to provide student loans to pay for postgraduate degrees that graduates of professional courses need to qualify for practice.