THE PRESS WEDNESDAY, SEPTEMBER 28, 1988. Learn now, jail later?

Press, 28 September 1988, Page 20

THE PRESS WEDNESDAY, SEPTEMBER 28, 1988. Learn now, jail later?

Consider the possibilities. It is the year 2010. Fifteen years ago, young Jessica X left New Zealand with a new degree in commercial law. She has hacked her way through the financial jungles of Sydney, then London, then Hong Kong. She has found time to combine success with marriage and a family. Now she returns to the land of her birth, to show off the grandchildren to her ageing parents. At the immigration desk at Christchurch Airport a warning light flashes as Jessica’s name enters the. computer. She is a wanted woman. A warrant is out for her. Jessica has left unpaid the loans her country gave her for university studies. The amounts were not large, but now Jessica faces years of interest, and interest on interest. Jessica must spend her first night back home in the airport’s cells while her frantic husband arranges a transfer of funds from Switzerland to pay for Jessica’s long-gone education. At least the hypothetical Jessica can pay. What if she could not? Would New Zealand, years from now, be imprisoning its former university students and polytechnic students — graduates or not — in an attempt to recover loans made a generation earlier for tertiary education? That seems to be the ultimate implication of the proposals from the Hawke inquiry on tertiary education, which recommends that tertiary students might be expected, from 1990, to pay for up to 20 per cent of the cost of their education. The money would come from loans, and the loans would have to be repaid once a former student’s income reached a particular level. The idea has a superficial appeal. For some young people, higher education, almost entirely at the expense of taxpayers, is an important step to a higher income and more satisfying work. The education is needed at a time when most users — the students — are not able to pay. A low-interest loan from the State might look like a fair compromise, a delayed application of user-pays. It is not. Such a system would fail to take account of the variety of reasons that lead people to universities and polytechnics, the variety of courses they pursue, or the variety of careers that follow.- In the end the honest, stay-at-home, successful former students would repay their loans through an income tax surcharge. Many others would not. The result would be a nightmare of bureaucratic

debt collection, or debt deferments. So many exceptions would be necessary — a point that the Hawke report begins to encompass — that the net gain to the community would probably be small. A system of loans would not necessarily encourage potential students with financial difficulties to seek higher qualifications; it could well deter them, or their parents. The system would not necessarily provide more funds, and hence more places in educational institutes, for students, unless the debt collection was rigorous. Even if it did, other controls would surely be needed to ensure that students learned the skills most likely to benefit their careers, or the skills most likely to be in demand by the community, and thus the skills that would lead to loan repayment. As matters stand now, most students who complete courses at tertiary institutions repay society’s investment by their subsequent working careers. Some do not. A system of loans to be repaid through individual tax surcharges would hardly improve matters. It could well serve as an incentive to emigration or to less well paid employment. For students in need, who believe they have promising careers ahead, loans are available now. For groups in the community who are said to be in some way at a disadvantage, the barriers to higher education do not come principally from lack of money but from the absence of parental encouragement, and from poor preparation during compulsory primary and secondary schooling. For these matters, other remedies are necessary. If the Government believes there must be restraints on spending on tertiary education, a solution may be found in directions other than greater application of the user-pays principle to students. More funding might be sought from private enterprise, especially for applied research or for the production of qualified people in areas of special need. The present financial cake, especially for universities, might be differently distributed so that more places could be found for teaching the skills the community expects to need, at the expense of teaching in less useful disciplines. The universities themselves might be encouraged to accept this notion. This raises questions about the direction of tertiary education, a matter also addressed in the Hawke report.