Thirst For Knowledge Creates A $256m Debt

The Age

Friday April 22, 2005

DAVID ROOD, HIGHER EDUCATION, REPORTER

FEE-PAYING university and higher-education students have racked up $256 million in debt for their study under a Government loan scheme - a seven-fold increase on initial forecasts.

The Federal Opposition said new figures showed that students who had taken up the loan, called Fee-Help, would owe more than $1.55 billion by the 2006-07 financial year.

Forecasts in the May 2003-04 budget predicted local fee-paying students would owe $29 million for their study.

Opposition education spokeswoman Jenny Macklin said higher-education students were being driven further into debt. She said the "phenomenal blow-out" and the deferred nature of the loans meant an increase in liability to the Government.

Following the Government's 2003 higher-education changes, students can now seek a $50,000 income-contingent loan, to be repaid when they start earning $36,000.

A fee of 20 per cent applies to the loan for undergraduate students. The loan is available to local fee-paying students at registered higher-education organisations, not just universities.

But acting Education Minister Gary Hardgrave said the estimated amount of Fee-Help debt was consistent with projections. "The Government expects to provide around $400 million in funding through Fee-Help in 2005," he said.

© 2005 The Age

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