Education shakeup expected in federal budget

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

Rochelle Elegado is worried she may have to repay her university loans sooner than expected, if the Federal Government changes concessions in the Budget. Source: SBS

The federal government is expected to force university students to pay back their HECS debts earlier by lowering the income threshold in next week's budget.

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

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

Second year University of Technology, Sydney nursing and international studies double degree student Rochelle Elegado told SBS her studies eat up so much of her time she could only work one day a week and lived at home with her parents.

Her university fees total more than $5,000 a semester, but Ms Elegado, 19, said most of it was covered by student loans under the HECS-HELP scheme.

The threshold for university student loans are expected to be lowered in the Federal Budget. Source: SBS

"I'm content with how it is right now, and having my fees deferrable and being able to pay them later,” she said.

“If they made it any harder I don't think I'd be very impressed."

Ms Elegado said changes to the HECS scheme could see some potential students forgoing tertiary education.

"Not many people are conscious about their fees, because [they think] 'oh it's just deferrable, I'll think about it later',” she said.

“I think it would make uni less attractive to students or aspiring students."

Professor Bruce Chapman designed the HECS system in the late 1980s and told SBS the threshold could be lowered and still be fair if the government made 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,” he said.

Professor Bruce Chapman was the main architect behind the HECS system, designed in the 1980s. Source: SBS

“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 $4 billion over four years.

Federal secretary of the Independent Education Union of Australia, Chris Watt, said 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," he said

"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. 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."