Economists have welcomed the government's plan to raise the level of income people need to earn before they need to make student debt repayments but argue that reducing the cost of higher education would have greater benefits than slashing existing debts.
Bruce Chapman, who was part of the team that designed HECS , has backed the government's plan to raise the level of income people need to earn before they need make student debt repayments.
The proposal seeks to ease the burden of student loans, which have become more costly with rising tuition fees. Currently, repayments are set as a percentage of total income. Under the changes, repayments would be calculated as a proportion of a person's income above then new $67,000 threshold.More than 1,000 workers could soon lose their jobs as Australia's universities aggressively cut costs ahead of the federal government's proposed international student caps."It a marginal collection, it's much gentler and much fairer than previously — we should have done it years ago.
Despite the reduction in repayments and overall debts, Richard Holden, professor of economics at the University of New South Wales, argued the reforms would do little to ease cost-of-living pressures. Dr Jackson said, from a fiscal perspective it was easy to see why the announcement was made — the debt relief was "off-budget" and therefore did not affect the government's underlying cash balance.Dr Jackson believed the debt relief was beneficial but did not directly address the high cost of degrees, which she said had risen disproportionately compared to other living expenses.
Professor Holden said the most effective change the government could make would be to remove the former Coalition government's "Job-Ready Graduates Program".
Student Debt HECS Repayments HELP Loan Debt Budget Off-Budget Government Debt Inflation Cost Of Living University Degree High Income Household Income Disposable Income Repayment Threshold VET Student Loan TAFE Apprenticeship
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