The Government Just Announced It’s Hiking Student Fees And Changing How Graduates Pay Off HECS
The federal education minister, Simon Birmingham, has tonight announced the government will cut university funding by $2.8 billion, increase student fees and force graduates to pay back their debt faster.
The new policies are in line with media reports from the last couple of days suggesting the government was once again targeting students for budget savings.
However, Birmingham confirmed that fee deregulation had officially been scrapped as Coalition policy.
The Cost Of A Degree Is Going Up
Starting from 2018 student fees will increase by 1.8 percent every year until 2021, resulting in a combined fee increase of 7.5 percent. Students will face fee increases of between $2,000 and $3,600 for a four-year degree.
A teaching student, for example, will see their fees increase by $1,250 to $27,800. According to the government, “These reforms will rebalance the contributions made by taxpayers and students.”
Universities Are Losing Funding
The government is also applying an “efficiency dividend” to universities that will see their base funding cut by 2.8 percent. For the University of Sydney, for example, this equates to about $16 million a year.
Birmingham described universities as “absolutely critical and central” to Australia’s success but when on to argue that the country needed to “chart a path to funding sustainability.”
Overall universities will lose $2.8 billion in funding over four years.
Sorry Graduates, The Changes Impact You As Well
At the moment university graduates with a HECS debt don’t pay to start paying it back until they earn over $52,000. Tonight Birmingham announced that threshold was being reduced to $42,000.
Graduates earning about $42,000 will be required to divert 1 percent of their income to pay off their HECS debt, or $420 a year (blaze it).
Additionally, graduates earning over $119,882 will be required to pay 10 percent of their income, up from the current 8 percent.
The changes will impact an estimated 180,000 graduates. The National Union of Students has already slammed the changes, describing them as “terrifying news for students”.
Student repayment threshold could be reduced to 42K almost half the national median salary- terrifying news for students #auspol
— Sophie Johnston (@NUS_President) May 1, 2017
When Does This All Happen?
The changes will be formalised in next Tuesday’s federal budget, but they still need to secure parliamentary support before they become law. At this stage it’s unclear if the proposals have the support to pass the Senate.
More to come.
Feature image via Facebook