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Students' Higher Degree Of Debt
Newcastle Herald
Friday April 22, 2005
STUDENT debt is set to soar, with a new forecast revealing that fee-paying university students will borrow $825 million a year by 2008 to pay for degrees costing up to $200,000 each.
A new loan scheme introduced this year, Fee-Help, has for the first time provided up to $50,000 for students who pay higher university fees at university and gain entry on lower marks. But the estimated Fee-Help debt $1.55 billion by 2007 is on top of the $10 billion already owed by the majority of students whose study is subsidised by the Federal Government. The federal Education Department estimates that the number of fee-paying students on loans will rise from 23,082 this year (with an average debt of $11,094) to almost 67,000 over the next three years. Deputy Leader of the Opposition Jenny Macklin said the "economically irresponsible" loan scheme would blow out by $1.36 billion over the next two years. She compared it to cost rises under the Medicare safety net scheme and said the Government "has lost all credibility on costings and commitments". "Young people will graduate from university with massive debts," she said. When Fee-Help was announced in May 2003, the Government estimated that "new loans" would cost $190 million from 2004-05 to 2006-07. But in advice sought by the Opposition, the Department of Education, Science and Training now estimates the cost at $1.55 billion over that period. A spokesman for Education Minister Brendan Nelson said the blowout claims were misleading because Fee-Help had soaked up existing schemes, such as postgraduate loans. "Ms Macklin is simply comparing apples with oranges in an attempt to confuse parents and students," he said. The Government would spend $400 million on Fee-Help in 2005, with most of the money going to postgraduate students who had used the now-abolished Postgraduate Education Loan Scheme. More than 50 undergraduate degrees cost at least $100,000. SMH
© 2005 Newcastle Herald
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