The Cost Of Learning

The Age

Monday March 8, 1993

David Bruce

University has just started _ do you know where you will find the cash to get through the year? DAVID BRUCE outlines the costs and some options.

WHATEVER happened to the long afternoons at the university cafe, the weekends at the campus chalet, or the endless student band nights at the local hotel? So much for free education, that Seventies whim when students were fully subsidised and could devote their cash to the more recreational side of their lives.

Maybe it is not that bad. University life can still be a time of abandon, but it now has to be tempered with financial prudence.

Education costs the student big bucks: government charges, campus fees, books, travel, rent, and so on.

How much does it cost to be a tertiary student? It varies from campus to campus and the type of course being undertaken, but the Student Financial Aid Office at the University of Melbourne has drawn up a rough comparison of the living and education expenses incurred by the average student at its campus.

There are costs that cannot be avoided. All institutions charge an amenities and services fee, which varies from $200 to more than $300; Melbourne's is about $324. (The federal coalition has promised, if elected this week, to do away with this fee and the admission to the student union that accompanies it. However, it will be too late for 1993 students. Voluntary student unionism is timed to begin next year.) Books, stationery, photocopying and other educational items amount to about $500 for the year. A transport concession card _ we will get to cars later _ costs $94. The card allows students to pay concession fares on public transport. So, that is about $900 in unavoidable expenses.

Further costs depend on the type of abode, of which there are three main alternatives: living at home, boarding in a residential college, or renting.

If possible, live at home, as it is the cheapest alternative, although the yearly cost for an undergraduate student living at home can be as high as $7000. If a student pays $25 board, spends $20 a week on lunches and drinks, $30 on travel to and from university and work, and a sundry list of expenses such as dental and medical fees, clothes, newspapers, haircuts, sports, and entertainment that amount to $40 a week, then $6000, or $155 a week, is being spent over 12 months. Add that to the unavoidable items listed above and it can be seen that even the cheapest way of living a student life costs a lot.

Most institutions have residential boarding colleges, which can cost several thousand dollars for the 31-week academic year. The benefit of college living, however, is that students live on or close to the campus and avoid transport costs. Some meals and other living expenses are included in the fees. A year in residences, although it is shorter than the full 52-week year, can cost more than $9000.

The last category, renting private accommodation, is the most expensive. To establish a liveable house or flat, pay bond and rent, food, transport fares, and miscellaneous expenses, a student will need up to $11,000, or $190 a week, on top of setting up costs. Setting up a rented dwelling can cost up to $1000 when all expenses are taken into account such as bond, rent in advance, telephone connection, and basic household items.

There are students who can get by paying rent and other costs for about $150 a week but, according to Mark Jones, from the Student Financial Aid Office, these students are living sparsely. ``They are really scratching and they are often coming to us for a loan because they can't make it. You do tend to need $180 to $190 each week plus the money to move into your house and to pay for academic costs." These figures do not take into account the costs of running a car. The bare minimum yearly cost of keeping a car is about $600, which includes registration, compulsory third party insurance, and third party property insurance _ but does not include petrol or repairs.

In short, Mr Jones advises against car ownership for any reason other than absolute necessity.

Finally, no analysis of student expenses is complete without the quaintly titled Higher Education Contribution Scheme. The contribution is, in fact, mandatory for most students as part payment towards the cost of their education.

TAFE and adult education students are exempt, but this group has to outlay much more substantial course start-up costs. Some TAFE courses that need a lot of materials and books cost more than $1000 on enrolment.

The standard HECS payment this year is $2328. Part-time students pay less and full-time students doing extra subjects pay more. You can pay upfront on enrolment and receive a 25 per cent discount or defer until your taxable income rises above average earnings and pay through the tax system.

Listing expenses is the simple part of the equation. Considerable attention needs to be paid to the supply side of the equation if you are to complete the year without falling into bankruptcy. A student has several options: a job, a family loan, an Austudy grant, an Austudy loan, a student financial aid office (or equivalent) loan, or a personal bank loan.

Part-time and casual work has long been a prerequisite for student life. The downturn has made work like this harder to find but most tertiary institutions have a student employment service that lists part-time, casual, and one-off jobs.

Although this form of income is irregular, it gives students the flexibility to chose the hours and days they wish to work.

The criteria for qualifying for an Austudy grant is too complex to repeat here, but every student should make it their business to find out if they qualify. This year students eligible for Austudy grants were able to ``top up" their grants with a loan, called the Austudy supplement. In simple terms, for every $1 of your grant you trade in, you get back $2 in a supplement. You can trade in as little as $250 or as much as $2000.

According to Mr Jones, the supplement is useful for some students.

However, it needs to be treated cautiously and students should seek advice before committing themselves. The supplement is a very expensive way of borrowing money if you expect to be able to repay the loan within three or four years. You should remember that you have to repay the full amount borrowed, including the grant that you had to trade in. For example, if you trade in $2000 of your grant for a $4000 loan, you will be only $2000 better off, but your debt will be $4000.

A second type of Austudy supplement for students who do not qualify for a grant but whose parents' income is below $50,000 seems to be a much better deal. Students can borrow up to $2000 at $40 a week for the year. If the loan is paid back within five years you actually pay back less than you borrowed because you get a 15 per cent discount.

That is, for a $2000 loan today, you pay back about $1700 (plus inflation) in just under five years from now. ``It's almost impossible to better this type of loan," says Mr Jones, ``unless your parents actually give you the money interest free themselves. So, if you are eligible there is not much point in looking around because you are not going to do any better. It's very generous." Most institutions offer their own low interest loans for students in special need. These loans schemes all differ from one another, so you will need to check your own institution for details. Note that for some students these loans are cheaper and more suitable than Austudy ``trade-in" loans.

The National Australia Bank and Commonwealth Bank also offer ``campus loans" of up to $10,000 at NAB and $5000 at the Commonwealth. They are available at low interest _ about 10.75 per cent _ for living expenses, travel, fees, and other study-related purposes. The banks tend to prefer final year students in high-profile courses such as medicine and law because of their better job prospects after graduation, but students from other disciplines and years have sometimes presented a good case for these loans.

© 1993 The Age

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