Major education changes expected in Tuesday’s budget

The government is expected to lower repayment thresholds for university student loans, while unions demand a better model for school funding.


Rochelle Elegado is in her second year of a nursing and international studies double degree at the University of Technology, Sydney.

She says it eats up so much of her time, she can only work one day a week and lives at home with her parents.

Her university fees total more than five thousand dollars a semester.

But Rochelle says most of it is covered by student loans under the HECS-HELP scheme.

“I’m content with how it is right now, and having my fees deferrable and being able to pay them later. If they made it any harder I don’t think I’d be very impressed.”

Student loans will certainly not be scrapped in the Budget, but the Government is likely to change the threshold.

When students finish university they have to earn at least 54,000 dollars a year before small HECS repayments start.

That is tipped to be lowered to around 40,000 dollars, meaning many graduates will have to worry about their debts sooner.

Rochelle believes that might lead some potential students to skip tertiary education.

“Not many people are conscious about their fees, because ‘oh it’s just deferrable, i’ll think about it later’. I think it would make uni less attractive to students or aspiring students.”

Professor Bruce Chapman designed the HECS system in the late 1980s.

He says lowering the threshold can still be fair, if the Government makes other concessions.

“You can still maintain the essence of that fairness by lowering the threshold. So long as it’s not too much and so long as you at the same time cut the rate of repayment, the system would remain equitable. So if you took it down to say $45,000 I think they need to also cut the rate. That is, not leave it at four per cent but to have it at say two per cent. I think the behavioural consequences for the students or the graduates who are repaying would be quite small.”

Money for schools is another area to keep an eye on during Tuesday’s Budget.

Last year the Government announced a funding increase to four billion dollars over four years.

Federal Secretary of the Independent Education Union of Australia, Chris Watt, says that money must go towards education reforms, recommended by the independent Gonski report on school funding.

“This Budget really needs to do better than the last one in terms of the future planning for school funding for 2018 and 2019. There’s no point just throwing money at a situation and not having a plan around it. We can’t meet those needs without the money. So we aren’t looking to throw money away willy nilly, we know what those needs are – it’s about having the money to meet those identified needs.”