The Student Loans Affair

Student feelings ran high around the country this week over the Federal Govermnent's plans to replace Austudy grants with loans. MARGARET EASTERBROOK reports.

The Federal Government failed in an attempt earlier this week to avert nationwide student protests planned for Thursday. It tried to head off the protests by announcing its opposition to replacing Austudy grants with loans.

The National Union of Students had organised the protests to hammer home to the Government, which has been considering the proposal as part of a review of the $1.3 billion student assistance scheme, its strong objections to loans.

Obviously aware of the depth of feeling, the office of the Minister for Higher Education, Mr Baldwin, released to the media on Monday a letter to the review's author, Dr Bruce Chapman, rejecting the loans proposal. Mr Baldwin said loans, which would be income-contingent and repaid through the tax system, would not ``fulfil my aim" of improving access for low-income and disadvantaged students.

Dr Chapman, of the Australian National University, reiterated his earlier announcement that, following consultations, he was now aware that replacing grants with loans after the first or second year of study was unacceptable. Instead, in his final report due early next month, he will propose that grants be maintained but that loans be optional in later years.

The NUS said protests would proceed because it was not convinced that the Government would rule out loans in any form, and because it had other concerns about Austudy. These included the need to reduce the age of independence from 25 to 18 and to increase grants to at least 120 per cent of the poverty line. The union also wants the spouse income threshold lifted from $13,000 to $20,700, and the personal income threshold to $8000 a year.

Mr Baldwin acknowledges that there is room for improvement but says that in the past year the Government has made significant changes, including lifting the personal income threshold by 25 per cent and introducing a hardship provision for rural and disadvantaged families. The Government has included a dependent child deduction in the spouse income test, and extended grants to students unable to complete their studies in minimum time.

The union's national president, Tony White, tried to dissociate NUS from violent elements, blaming the much-publicised disorder outside the Victorian Parliament on a ``lunatic fringe" organised by the International Socialist Organisation.

Although the issue is a federal concern, Mr White said the protesters were using State Parliament as a focal point. They had had no intention of storming the building, as was attempted by the more radical element.

Given the sensitivity of an issue that related -directly to whether some students could feed and clothe themselves while studying, emotions were running high, Mr WHite said.