Government fears $12b in student debts will never be repaid
STUDENTS have racked up mortgage-sized debts with one graduate owing more than $450,000 in student loans, and the government fears a quarter of the $50b owed by students will never be paid.
NSW
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SERIAL students and university dropouts are failing to repay mortgage-sized loans from the taxpayer — with one graduate owing the government $462,036 in student debt.
Nine other university students in NSW owe between $216,000 and $226,490 each in student loans, The Daily Telegraph can reveal.
Confidential Australian Taxation Office data shows that a student in the ACT owes $437,057, while two Victorian students owe $374,158 and $309,932 in student loans.
The federal Government fears that a quarter of the nation’s $50 billion in outstanding student debt — or $12.5 billion — will never be repaid.
READ MORE: Student debt was $30b just three years ago
Students are not required to pay back their HECS-HELP loans unless they earn more than $55,874 a year.
In NSW alone, 810,347 students and graduates have yet to pay back $17.4 billion in student loans.
Federal Education Minister Simon Birmingham yesterday accused some students of “trying to game the system’’ by racking up huge taxpayer-funded loans that they “never expect to repay”.
“We’re acting to claw back the taxpayer loans that some students are racking up with no intention of ever repaying,’’ he said.
Labor is trying to block the Turnbull government’s legislation to force students to start paying back their loans faster next year, in a bid to save $2.2 billion.
Tuition fees would rise 7.5 per cent over the next three years and students would have to start repaying loans when they earn $42,000 a year, at a rate of $8 a week.
National Union of Students president Sophie Johnston blasted the government yesterday for “trying to rip away our future by attacking our education’’.
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“This generation is already faced with a severely insecure job market, low wages and a housing market that is in crisis,’’ she said.
“This proposal will make a bad situation much worse and could leave young people with a lifetime of serious debt.’’
Sydney student Madeline Lucre, 21, is already $9755 in debt after completing one year of an Arts degree at Monash University, before switching to a Bachelor of Communications at UTS this year.
Ms Lucre, who lives with her mother in Randwick and works part-time as a waitress, expects to be another $19,000 in debt by the time she finally graduates.
“A lot of young people start out at university and are not sure what they want to do, so they sample a few things and that HECS debt follows them,’’ she said yesterday.
“I don’t see why it can’t be free — the politicians who put this in place did get to go to uni for free and I think that’s unfair.’’
The average HECS-HELP debt is just $20,700 but some students have amassed mortgage-sized debts by dropping out of multiple courses or continuing to study for many years as “professional students’’.
Taxpayers bankroll an average of 58 per cent of the cost of university tuition fees but students can borrow through interest-free HECS-HELP scheme to cover the gap.
A six-year medical degree costs students about $75,000 and a three-year teaching degree costs about $19,000.
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