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The Grattan Institute just released a report promising more issues for students who have accepted or are considering accepting a VET FEE Help loan from the Australian government.
Currently, students do not need to start paying back their loans until they attain an income level of $54, 186/year. In a scrambling effort by the Australian government to start reducing the billions of dollars that this scheme has accrued for taxpayers, the report suggests that that bar be lowered to $42,000.
This means that once students start making $42,000/year, they would be required to start repaying their loans, relieving some of the tax burdens on Australian citizens, but causing great financial strife for students and former students who may not be able to pay back that loan at only $42,000/year.
Andrew Norton, the author of the report, states that $7.8 billion in debt has been accrued by the scheme. He further reports that, “the key message [of VET-FEE Help’s income addendum] should protect graduates against financial hardship, but the program is becoming unsustainable.”
For students who have accepted the loan under the condition that they wouldn’t have to pay back tens of thousands in debt until after they are capable of doing so comfortably, this is life-changing news.
Barney Glover, chairman of peak group Universities Australia, has countered the report’s proposed solution by stating, “the real issue is that we need a reform package.”
Ian Oliver, CEO of National Training, states that, “rules and debt recovery strategies are likely to keep changing as the government remains under pressure to collect student loans.”
Mr. Oliver’s advice for students is simple: Take control of your learning future, you should be able to enroll in popular online diplomas for less than $2,000, total cost. The fast-talking brokers and sales agents often get in excess of $3,000 just for a signature that leaves the student with a debt, and the government funding a course of some $10,000 to $20,000.This would be another expensive surprise for students that have a loan debt. In the past, a major selling point for the brokers and agents, was, “mate, you will probably never have to pay. The chances of you earning more than $50k are slim.” That doesn’t apply anymore and students who have already signed on the dotted line are stuck with the bill.
