University fees for popular courses are set to rise dramatically with the Turnbull government proposing partial deregulation, dubbed “alternative model flexibility”.
Universities will be able to set their own fees for several courses, but would lose out on government public funding as a result. Treasurer Scott Morrison is also still hoping to bank $1.4 billion in cuts from 2018-2012, nearly $2 billion less than what was originally proposed in Joe Hockey’s 2014 budget. Those original changes are yet to be passed by the Senate, and the amended cuts will go to parliament over the next 12 months.
It’s expected that many universities will make the changes to the cost of Arts degrees. However, any increases won’t add to the bottom line for the campus, instead saving the government money as it withdraws funds.
The Budget Papers state that “this measure is estimated to achieve savings of $2.0 billion over five years from 2015-16 in fiscal balance terms and cost $596.7 million over five years from 2015-16 in underlying cash balance terms.”
But the real sting for students saddled with HECS debt is that the 2016 federal budget is proposing a “household means test” on the repayment threshold. Currently graduates don’t start repaying their debt until they earn more than $54,126.
The changes will take into account of household incomes, which includes defacto partners and the parents of graduates still living at home. That means how much your long-term boyfriend/girlfriend, or mum and dad make will determine when you having to stay paying back student loans.
Outstanding student debts are expected to hit $70.4 billion by 2018, which is why the government is looking for ways to repay loans earlier.
At this point, the proposal has not set a threshold for household incomes before repayments kick in, but the government is hoping to introduce the changes by January 2018.
To make sure fees don’t blow out completely, the government is appointing a group to monitor the sector.
The government also wants students to pay back their HECS debt sooner, and as part of that, a new “household income test” is being proposed, where the total income of everyone in your household, including parents and defacto partners will decide when the debt will have to be paid back.
Lastly, the government wants to introduce a base ATAR mark for university admission to allow for “high quality” undergraduates and education.
If a student doesn’t get a high enough mark, no matter how many spare places are available in the course, their only choice is to enrol in TAFE or a private college.
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