University students will repay their government university loans earlier and have a lifetime limit on how much they can borrow under significant changes announced by the federal government.
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Announced as part of the mid-year budget update, the federal government will also freeze university funding at 2017 rates until 2019.
From 2020 the government will fund universities in line with the growth rate of the national working age population, scrapping the demand-driven funding system.
Education Minister Simon Birmingham said since 2009 Australia’s universities had been funded at twice the growth rate of the economy, and changes needed to be made for long-term sustainability.
“Attrition has increased, six-year university completion rates have fallen from 67.2 per cent to 66 per cent and short-term employment outcomes dropped from 83.6 per cent to 70.9 per cent,” he said.
The proposed changes are the latest efforts from the federal government to save money within existing legislation, after failing to pass a $2.8 billion university funding reduction through the Senate earlier this year.
Tasmanian Labor Senator Helen Polley said the changes effectively placed a cap on university places.
“The cuts announced today will hit hardest in areas where university attainment is lowest – like Tasmania,” Senator Polley said.
“The federal government should be doing all they can to encourage young Tasmanians to further their tertiary education.”
However leading economist and University of Tasmania Vice-Chancellor’s Fellow Saul Eslake said the funding changes could, after the immediate two-year freeze, benefit UTAS.
Mr Eslake said if funding is calculated in line with the national working age population, UTAS would have a “great opportunity” for higher funding rates.
While freezing funding does not need legislative approval, the federal government’s further proposed changes to HECS help loans do.
Students studying medicine, dentistry or veterinary science would be given a lifetime HECS borrowing limit of $150,000. Students studying other courses will have a lifetime limit of $104,440.
Students using the HECS-HELP system to complete a degree will start repaying their debt as soon as they earn $45,000 per year – a decrease from $52,000.
UTAS Acting Vice-Chancellor Professor Mike Calford said continued growth in Tasmania’s relatively low higher education attainment rates was an imperative and the university would “remain in discussion with the government” to increase participation and attainment rates for Tasmanians.
