Tertiary loans bill a key win for PM

The Turnbull government has succeeded in passing the first piece of significant higher education legislation since 2013.

Australian Conservatives leader Senator Cory Bernardi

The Turnbull government has succeeded in passing the first piece of significant higher education legislation since the Coalition came to power in 2013, with a new measure to require earlier repayment of student loans.

The bill, passed in the Senate on Monday and in the House of Representatives yesterday, means students with HELP loans will start repaying through the tax system when their annual income reaches $45,881, compared with the current threshold of $55,874.

The new threshold will apply from July 1 next year and requires students to repay only 1 per cent of their income at that level, amounting to less than $9 a week.

However, to pass the bill through the Senate, the government agreed to an amendment from Australian Conservatives senator Cory Bernardi to remove the 25 per cent loan fee currently paid by students at private universities including Bond, Torrens, Notre Dame and the University of Divinity.

Senator Bernardi, whose son studies at Bond University, said the fee was an equity issue and amounted to “a tax on university choice”.

“If you decide you don’t want to go into the public university system you are being penalised,” he said.

The bill also imposes a loan limit on HELP loans from January 1, 2020, but the limit is replenishable, meaning that students can reborrow up to the limit after they have paid off some of their debt.

It also requires graduates earning high salaries to pay off their debt faster, with those earning more than $134,573 repaying 10 per cent of their income.

The legislation aims to make the HELP loan scheme more affordable. Currently the HELP student loan debt owed to the government amounts to $54 billion.

“Left unchecked these costs would spiral out of control,” Education and Training Minister Simon Birmingham said.

Assistant Minister for Vocational Education and Skills Karen Andrews said the removal of the loan fee for students at private universities meant that everyone would be “treated equally no matter the university they choose for their studies”.

While this bill falls way short of being considered as major reform, it is the first higher education bill of real policy substance to be passed by the Coalition since the Abbott government won power five years ago.

The Senate twice rejected then education minister Christopher Pyne’s plan for deregulated fees, more expensive HELP loans and extension of government subsidies to pathway courses and private providers.

Senator Birmingham also was thwarted by the Senate and resorted to a non-legislative route to impose his freeze on funding for university courses, which came into force this year.