Five-year restriction on Hecs

Australian students will be limited to the equivalent of five years'

full-time study if they are admitted to a government-subsidised place after January 2005.

Under the learning entitlement system, students paying reduced fees through the Higher Education Contribution Scheme will be given a personal ID and tracked through their courses by a yet-to-be developed computer system.

After five years they will either leave university or pay the full cost of their tuition. The government is also introducing an interest-bearing loans system to allow students to borrow up to A$50,000 (£20,000) to pay full fees.

Education minister Brendan Nelson said the five-year entitlement could be extended for longer courses such as medicine. To encourage lifelong learning, students would receive an additional entitlement after a number of years.

"The learning entitlement will provide greater opportunities for more students to gain access to a commonwealth-supported higher education place," he said. "New entrants would then be able to occupy places freed by students who have consumed their entitlement."

But the plan was criticised by students and academics who claimed students could use all of their five years as an undergraduate and not be eligible for a Hecs place as a postgraduate.

Benjamin McKay, president of the Council of Australian Postgraduate Associations, said that during Dr Nelson's year-long review of higher education, "at no time did we suggest that saddling students with a repackaged debt scheme, attached to the bizarre concept of learning entitlements, was a sound investment for the funding of university places".

All students will receive the full five-year entitlement from January 2005, regardless of how much study they completed previously.