Federal Budget 2014: Universities to change degree costs as students hit with earlier repayments

UNIVERSITIES will be able to decide how much they charge students for degrees, which will hit students with earlier repayments for their debts.

UNIVERSITIES will be able to decide how much they charge students for degrees in an overhaul of Australia’s tertiary education sector, which will also see students having to repay their government debts earlier.

The Coalition has used its first budget to make significant changes to the way universities and schools are funded.

The new measures will extend financial assistance to people studying diplomas or undertaking degrees at private colleges or TAFE from 2016, at a cost of $820 million to the budget.

But the amount of money the government provides to universities for each course will be cut by about 20 per cent, and current caps which prevent universities across the country from hiking up the cost of degrees will be abolished from 2016.

New system ... for staff and students at university campuses around the country.

Federal Treasurer Joe Hockey said the higher education sector had previously been held back.

“With greater autonomy, universities will be free to compete and improve the quality of the courses they offer,” he said in his budget speech.

The federal budget confirmed the Abbott government will not continue with the fifth year of Labor’s so-called Gonski school funding reforms. Rather than increasing school funding by 4.7 per cent, as Labor had promised to do under Gonski, the Abbott government will increase school funding in line with inflation and take account of increases in enrolments.

The move away from Labor’s model means the Coalition will spend about $130 million less on schools in 2017-18 than the previous government promised.

From 2016 students will have to start paying their Higher Education Loan Program (HELP) debts back earlier, at a rate of 2 per cent, when they earn $50,638. Currently graduates do not have to start paying down their HELP debts until they earn $53,345.

Student debts will also grow faster, with the government changing the indexation and aligning it to yields from 10 year government bonds rather than inflation.

Under fire ... Education Minister Christopher Pyne has been critcised by students in numerous university protests.

The changes to the indexation and the repayment thresholds will deliver a budget saving of $3.2 billion over the four years from 2014-15.

Young Australians will face a welfare crackdown under new “learn or earn” measures, with jobseekers under 30 subject to new 6 month waiting periods. And unemployed Australians under 25 will only be eligible for Youth Allowance, not Newstart.

People under 35 on the Disability Support Pension, who are deemed to have some capacity to work, will also be put on ‘engagement plans’ to get them back in the workforce.

But Australians undertaking a trade will be eligible for concessional Trade Support Loans of up to $20,000, in a move designed to even the playing field with university students.

New efficiency measures will be demanded of both the Australian Research Council and the Australian Curriculum, Assessment and Reporting Authority.

But an additional $245.3 million will be provided over five years for the National School Chaplaincy Program.

Originally published as Federal Budget 2014: Universities to change degree costs as students hit with earlier repayments