Students loan scheme blows out to $30 billion

[nero_bolt]

THE cost of the university loans scheme has ballooned to more than $30 billion with some students owing over $400,000 for their tuition.

The most expensive students have racked up individual debts of $413,252, $313,308, $248,078, $244,198 and $200,743 under the interest-free Higher Education Loan Program (HELP), data obtained by The Daily Telegraph reveals.

WE ARE PRIVILIGED TO HAVE HELP, SAY STUDENTS

More than $7 billion of the soaring total debt bill - more than the gross domestic product of many small countries - is listed as "doubtful" and may never be paid back.

Many of those former students owing large individual amounts are believed to have disappeared overseas, failed to complete their studies, stayed out of the workforce or have failed to reach the $51,309 salary level which triggers compulsory loan repayments.

The blowout in loan costs comes as increasing numbers of students enter universities under the demand-driven system of uncapped places and a government target to have 40 per cent of all 25-to-34-year-old Australians to hold a bachelor's degree by 2025.

Figures provided by the federal Department of Education show HELP costs increased by $1.6 billion in 2012-13.

The average HELP debt is now almost $16,000 but is expected to increase to $19,500 in 2016-17.

A spokesman for federal Education Minister Christopher Pyne said yesterday the government had no plans to privatise HELP or sell the debt associated with the program.

He said the proportion of new debt not expected to be repaid had remained relatively stable over the past three years at 16 to 17 per cent.

Federal budget data estimates the number of Commonwealth-supported university places for which HELP loans are paid will grow from 448,800 to 555,300 by 2016-17. The budget also predicted the proportion of new debt not expected to be repaid would rise to 22 per cent within three years.

The most recent available data shows NSW's top five areas for HELP debt are Liverpool in Sydney's southwest, Wentworthville in the western suburbs, Newtown in the inner west, Wollongong and Baulkham Hills in the northwest.

Surry Hills in the inner city, Randwick in the eastern suburbs, Lismore on the north coast, Cabramatta in the western suburbs and Bondi in the city's east are also hot spots of university student debt.

According to the annual Australian Graduate Survey, arts and design students are among the lowest-paid tertiary-educated workers. They have a starting salary of about $40,000.

Discounts for upfront payments have been dropped amid speculation that university fees could be deregulated and the HELP scheme could be privatised.

In the past, Education Department officials have been asked to consider ways that HELP payments could be extracted from graduates who live overseas. But enforcing repayments from people outside Australia could be difficult and costly.

[tulip*place]

Due to the start up scholarship now being a loan this to will be added to HELP.  In the past some recipients of  Youth Allowance were entitled to a startup scholarship each year,  approx $1,000.00 per semester.  Now this will be a loan and to be paid back (or not).

[margomeoz]

I think it was/is a wonderful scheme for young Australians who could not otherwise afford to go to UNI or did not have enough marks for a scholarship.

I have 2 sons who went on that scheme, both owed a lot of money the oldest has paid his in full, the youngest will still be paying for a long time because they also lent money to students who needed it interest free causing him to pay back an extra $40,000.

I think they need to keep some kind of scheme for young Australians to go to UNI, don't know how they can police the ones who drop out or go overseas.