I expanded on my arguments against reducing HECS-HELP debt in exchange for community service for the Higher Education Supplement on Wednesday, but I am yet to convince everyone I have spoken to about the idea.
My main objection is to the link between community service and student debt, since I disputed the synergies between the two. If taxapayers are going to support community service, they should try to recruit the best candidates for the available work, whether or not they have student debt.
Against this view, I was pointed to Andrew Leigh’s comments in his AFR column:
Each year, approximately 75,000 young Americans participate in AmeriCorps, and many continue to work with the community after their service year ends. Implemented here, a similar program might have practical benefits for underprivileged communities. But its ‘eye-opening’ benefits could be greater still – giving affluent suburban youth a chance to spend a year facing disadvantage in all its complexity.
‘Affluent suburban youth’ are the largest client group of Australia’s universities. Perhaps it would be useful for them to see how the other half – or more accurately the 10% at the other end of the socioeconomic spectrum of their own 10% – live. But as Paul Miller’s research confirmed, students from more affluent backgrounds are less likely than people from poorer backgrounds to defer their student charges and so have a student debt to be reduced. Those who do accrue debt are unlikely to find it difficult to pay it back, so cuts to HECS-HELP will have weak incentive value. There are also lots of well-off people who have never been to university or long-ago paid off any debts whose eyes might also be opened by contact with ‘disadvantage’.
The only real argument I can think of for paying for community service out of the HECS-HELP debt is that because the HELP debt has no real interest accruing, and some of it will be written off as debtors die, move overseas, or never earn more than thethreshold, its worth to taxyapers is less than its face value. So say we decide that we pay community corps workers $15 an hour, we could reduce the face value of a graduate’s HECS-HELP debt by that amount, which might be the equivalent of paying $10-$12 an hour in long-term cost to taxpayers.
Of course this depends on a range of assumptions about repayment patterns among community corps workers if they proceeded with alternative plans. And to the extent the community corps attracts people who are unlikely to repay anyway, it is not recruiting the future leaders whose experience with disadvantaged groups helps justify the scheme on Andrew L’s argument.
Overall, then, I remain unpersuaded that there are sufficiently strong synergies between community service and student debt to justify linking the two in a policy initiative.