Opposition concerned by student uni debt

The federal opposition says the removal of caps on the number of university student places lacked foresight and has contributed to the nation's ballooning bill for outstanding student loans.

But the Coalition is stopping short of pledging to reintroduce the caps if it wins this year's election.

A Grattan Institute report released on Monday showed outstanding student loans stood at $26.3 billion, including $6.2 billion that was not expected to be repaid.

The report said the amount written off was because some Higher Education Loan Program debtors were forecast to move overseas or die before their debt was repaid.

Tertiary Education Minister Chris Evans has asked his department to consider ways to recover payments from people now living in another country.

The Gillard government last year removed caps on the number of federally supported undergraduate places, replacing it with a ''demand-driven'' system.

The Shadow Minister for Universities and Research, Brett Mason, said the Coalition was ''concerned that foresight was not demonstrated when the system was uncapped''.

Senator Mason said the government should have considered extra methods of student debt recovery when the new system was first implemented.

''The uncapping of student places has resulted in a predictable equation: more students equals more student loans equals more debt, including bad debt, as evidenced by the increase in bad HELP debt by almost $1 billion over the past 12 months,'' he said.

Senator Mason's spokeswoman was unable to say whether that meant the Coalition was looking to reintroduce caps.

National Tertiary Education Union national president Jeannie Rea said the previous capped system had not been as responsive to student demand, but called for an increase in federal funding provided per student.

National Union of Students president Jade Tyrrell said the government's decision to remove the cap on the number of places should be applauded.

Ms Tyrrell called for more career support for students upon their graduation to help them get jobs that would see them reach the threshold to repay student loans.

She said it was now typical for graduates to take more than a decade to pay off their student loans.

''Obviously the cost of education is rising and the cost of education in terms of the student contribution has also been rising as well,'' Ms Tyrrell said.

The report author, Grattan Institute higher education program director Andrew Norton, said graduates started paying back their loans when their annual income topped $49,000.

''There are some ways of reducing the cost to the government of the loan scheme, such as making further efforts to recover monies from graduates that are working overseas,'' he said.

‘‘You can fiddle with the threshold at which people start paying back their loans.’’


The Opposition is concerned about mounting student debt. Picture: ANDREW QUILTY

The Opposition is concerned about mounting student debt. Picture: ANDREW QUILTY


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