policy & reform
Repayment debate
Political parties have competing perspectives on student loan reform. By Dallas Bastian
Billions of dollars owed under the income-contingent student loans are not expected to be recovered any time soon.
All up, students owed $ 30 billion under HELP as of June 30, 2013, according to Grattan Institute higher education program director Andrew Norton. And experts estimate the debt will continue to soar.
HELP’ s annual costs – primarily debt not expected to be repaid and an interest subsidy on that debt – are expected to reach $ 1.75 billion by 2016-17.“ This number will increase rapidly in coming years due to the large increases in student enrolments and extension of HELP to new purposes,” Norton says.
Considering those numbers, it’ s no surprise the issue of HECS-HELP and related schemes will form part of the Abbott Government’ s review of the university funding system, which Norton and former Liberal education minister David Kemp will perform.
Norton says HELP is becoming an increasing cost to government and most of that expense is being shifted to taxpayers.
Furthermore, he says that with the proliferation of HELP schemes, such as HECS-HELP and FEE-HELP, the system has become complicated.
The Grattan Institute is working on a report on HELP debt, examining the threshold for repayment and the write-off of HELP due to death and non-collection from people who are overseas.
Many experts in economics and tertiary education, however, say only minor changes should be considered to the system of income-contingent loans for students.
Architect of the HECS system, professor Bruce Chapman, says the amount of debt HECS accrues isn’ t a major concern and that the current rate of repayment on that debt is manageable at 85 per cent. campusreview. com. au | 11