The United States isn’t the only country facing a student loan debt crisis. The main financial aid program in Australia is in serious trouble and in desperate need of change, according to the Australian Financial Review.
Universities Australia, the universities’ main lobby group, is encouraging the government to investigate key policy changes to the country’s Higher Education Loan Program (HELP) in order to make it financially viable and ensure its success for future students.
While HELP has been an important part of the country’s higher education system, there are some loopholes in the system that makes it easy for borrowers to get out of repaying their loans. Right now, students only repay their debt when their income is over $55,000 per year. Individuals who make less than $55,000 but are married to another working adult who makes more money still aren’t required to repay their debt, even if their household income is well above the threshold. There are also no loan fees for students taking government-subsidized university courses.
The proposed changes include moderate increases in repayment amounts and loan fees, and tougher debt recovery for students who could afford to repay their loans but weren’t required to.
These modifications are in line with the suggestions made by Education Minister Simon Birmingham, who last year proposed to base loan repayment on household income, as well as collecting debts from the estates of diseased borrowers. He is expected to go into further detail about his plans for HELP in an announcement this year.
Universities Australia and the federal government don't agree on everything, though. The lobby group strongly opposes a plan by the government to cut spending on university subsidized courses by 20 percent. Universities Australia believes this act would be detrimental to the country’s higher education system and its students.
Either way, the issues with HELP are a serious problem for Australia. It currently has $52 billion in outstanding HELP loan debt, with an estimated $8 billion of it being lent out in 2015.
Image Copyright Bernard Spragg.