Changes To HECS Repayments And Loans Set To Hit Uni Students
As a result of the changes the Government has been accused of making some degrees available only to the elite.
What you need to know
- Borrowers will have to begin repaying student debt once their annual income reaches $45,000, instead of the current $55,874 threshold
- Australia has more than $50 billion worth of outstanding student loans
- The National Union of students says it’s an unfair grab for cash
University students have hit out at changes that will force them to start paying their HECS debts sooner.
Borrowers will have to begin repaying student debt at a rate of one percent of income once their annual income reaches $45,000, instead of the current $55,874 threshold.
The Government also wants to cap student debt at $104,440, which means students would have to pay down debt before being entitled to any further government-subsidised places.
The National Union of students says it’s an unfair grab for cash from the Government that would make some degrees available only to the elite.
“Incredibly unfair. I think that it’s against the spirit of Australian higher education," National Union of Students president Mark Pace told Ten Eyewitness News.
“We’ve seen some pretty extreme cases where students will have to pay up to $50,000 upfront to be able to practise law with their qualifications.”
“Law and business and management are effectively going to become elite degrees. If you can’t pay for it upfront then you’re not able to do it or there might be a situation where students will have to take up dodgy private loans.”
Pace said he wanted to make sure that education remains accessible, and ensure future and prospective students aren’t scared away from further qualifications because of these additional fees.
The union says there are currently 35,000 students studying combined degrees that exceed the new loan cap and anyone in this position in future would have to pay thousands of dollars in fees upfront.
But the Government says it’s a way of reigning in debt and limiting excessive borrowing.
Australia has $50 billion worth of outstanding student loans that taxpayers are currently holding on the federal books, said Federal Education Minister Simon Birmingham.
"Around a quarter of that is estimated will never be repaid unless we make some changes.”
“These are modest changes to ensure that people start making small repayments at a reasonable income.”
He said the new "simple" 1 per cent repayment rate meant just $8 or $9 a week for people on the first income threshold around $45,000 or above.
“The cap on student debt is to stop individuals who go and rack up unreasonable debts against the taxpayer clearly by being serial students in many instances," he said.
“There’s also a signal being sent to universities here that they need to think carefully about the pricing that they put on some of these courses, that we don’t want to see students take on unreasonable debts.”
If the changes pass parliament, they are slated to begin on Sunday.