policy & reform
She says labour force under-utilisation now stands at 13.5 per cent and that a high proportion of people working part time would like more work.
“ If these people had full-time jobs, they would be earning enough to pay back their debt,” Chesters says.
HELP – DEAD DEBTOR RECOVERY One option that was left out of the Budget was collecting debt from the estates of deceased borrowers. Unlike credit card and mortgage debt, HELP student loans are cancelled when the debtor dies.
“ Garnering repayment from deceased estates is the single easiest way to save money in higher education,” says Norton, who notes that HELP is one of the few loans that dies with the debtor.“ It is hard to see how this disadvantages higher education in any way because the cost is entirely borne by people who are not involved in higher education, probably in most cases the adult children of HELP debtors. Therefore, it’ s hard to imagine there is any disincentive and therefore there is zero effect on the bottom line of universities.”
Chesters says, however, that the reason HELP debt dies with the debtor is that it is acquired for a student’ s non-transferable human capital.
“ My concern is that the surviving partner in a relationship may have to re-mortgage their property to pay off a HELP debt,” she explains.
I would’ ve preferred if we had adopted [ the English regime ], where the real rate of interest is charged, but only when people are earning over the threshold, so they don’ t accumulate very large amounts of nominal debt.
“ If someone has not paid their debt, it is because their income was not high enough for a sufficient period before their death. For people whose only wealth is in their home or superannuation, requiring their beneficiaries to pay off a HELP debt could create quite a lot of hardship.”
But Norton argues that many HELP debtors are in high-income households before their death.
“ About 40 per cent of partnered female graduates earning less than the threshold have partners who earn $ 100,000 a year or more,” he says.
OVERSEAS DEBTORS Another group that seems ripe for HELP debt recovery is debtors who leave Australia for an extended period and so are not required to pay tax in Australia. HELP is recovered through the Australian Taxation Office, which doesn’ t have jurisdiction over income earned abroad.
An ANU study shows that about 10 per cent of graduates will work overseas for at least one year in the first 3.5 years after graduation, with most spending less than five years abroad before their return.
The Commission of Audit stated that enforcement of overseas debtor repayment would be administratively difficult and costly; however, ANU’ s Chapman disputes that.
“ If it is a legal obligation that those with a HECS debt who go overseas pay the minimum every year they are away, there’ s no need for the government to chase it, and it’ s quite straightforward,” Chapman says. ■
The 2014 ATEM / Campus Review Awards for Best Practice in Tertiary Education Management
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The categories are:
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u The Research Master Award for Excellence in Research Management
u The HES award Excellence in Financial Management
u The Unijobs Award for Excellence in Human Resource Management
u The Award for Excellence in IT Management
u The NTEU award for Excellence in Community Engagement
u The Campus Living Villages award for Excellence by a New Entrant in Tertiary Education www. unisuper. com. au enquiry @ unisuper. com. au
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