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Grattan report prepares ground for increase in university fees

National Tertiary Education Union

Yesterday’s report by Andrew Norton at the Grattan Institute entitled “Doubtful debt: the rising cost of student loans” prepares the ground for the Abbott Government to  increase university fees, or to use loans as a form of student income support, the National Tertiary Education Union (NTEU) said.

The report, authored by an advisor to the Government on potential changes to the Demand Driven Funding System, focuses on the cost of writing off doubtful or unpaid debts, which have reached over $1billion per annum and are forecast to continue to rise.

“While the NTEU shares the report’s concerns about the financial sustainability of the Higher Education Loans Program (HELP) we do not share all of the authors’ proposed solutions” Jeannie Rea NTEU National President said.

“The most effective way to reduce the cost of doubtful debts associated with HELP is to make sure the level of debt students accumulate is kept manageable by reducing the cost of studying at university.

“Going to university shouldn’t be like taking out a mortgage but for a student enrolling as a government supported student in 2014, their tuition (HECS) fees will range from $20,000 to $65,000 depending on the degree in which they enrolled.

“The NTEU has created a website calculating the rising debt which shows that HELP debts are increasing at a rate of $500,000 per hour.

“While the NTEU supports the proposal to recover outstanding debt from graduates living overseas, we remain concerned that the other recommendations undermine one of the underlying principles of Australia’s pioneering income contingent loans program for university students; that students only be required to repay their university fees if they gain a financial benefit from their education.

“Rather than moderating the level of doubtful HELP debt by reducing the cost of tertiary education and the level of debt owed by the average student, this report is preparing the ground for future increases in fees, and even making it easier for the Government to extend the use of loans to other services such as for student income support. This is unsustainable.

“Put simply, the Government should be adopting policies that reduce the cost of a university education and the level of individual student debts, not policies that encourage students to go even deeper into debt.  Such a policy would not only be financially irresponsible it would also impact most severely on the most disadvantaged students who would find it increasingly difficult to attend and successfully complete their degrees”, Rea concluded.

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