How the proposed higher education reforms will affect you

The Australian Government is attempting to legislate a number of reforms to Australia’s higher Education system, mostly regarding funding. As of January 2015, these reforms have not passed Parliament yet; the Government is still in negotiations with the Senate.

The main proposals in the reforms are as follows:

  1. Decrease in the subsidy provided by the Government for Commonwealth Supported Places (CSPs)
  2. Deregulation of tuition fees
  3. Support for students studying for diplomas and associate degrees
  4. Support for students studying at all higher education institutions
  5. Changes to the HELP loans
  6. Improve access and equity

A complete list can be found here.

It should be noted that proposed reforms which would see an interest rate charged on the HELP loans pegged to the bond rate has been scrapped; it will continue to increase on par with the Consumer Price Index.

Students enrolled on or before 13 May will continue under the existing arrangements until they finish their course, or until December 21 2020, whichever comes first.

Changes will not take place until 2016; that is, during 2015, existing arrangements will still hold.

Decrease in subsidy

This means the Government will decrease by 20% the funding given to universities for students enrolled in a CSP. When a student enrols in a CSP, the Government essentially pays the universities on behalf of the student; however, the student still needs to make a contribution.

Deregulation

Currently, student contributions are capped by law, so you would never have to pay more than this limit. This is done by grouping courses in different bands, depending on the student contribution.

However, the Government wishes to remove these caps. This means universities are able to charge any price they wish to for their degrees. Hence, fees may rise or fall, depending on market forces such as competition and supply/demand.

It is expected that the fees rise by about 20% initially, to cover the decrease in Government subsidies.

Support for diplomas etc.

Currently, there are only a limited amount of CSPs for students studying diplomas, advanced diplomas and associate degrees. The Government wants to expand this by extending the Demand Driven Funding System, already in place for the longer degrees.

This means all domestic students studying for these sub-Bachelor degrees will be able to apply for a CSP.

Support for all higher education institutions

This means that CSPs will be available at all higher education institutions, including TAFEs, private universities and private colleges.

Currently, these institutions are not eligible for CSPs.

Changes to HELP loans

  • Removal of the 25% FEE-HELP loan fee
  • Removal of the FEE-HELP limit
  • Merging of the FEE-HELP and HECS-HELP into a single scheme called HECS
  • The threshold for repaying the loan will be revised to $50,638. When a graduate earns above this limit, they must make 2% repayments
  • A freeze on interest rates for 5 years for the primary carers of a newborn, if they earn below the threshold
  • Removal of the HECS-HELP benefit scheme which reduced repayments of the graduates in certain areas such as education, nursing, maths and science

Access

Universities are required to spend 20% of additional revenue made from the deregulation of fees on creating Commonwealth equity scholarships, to support student access, participation and success. This is in addition to any existing schemes.

More information can be found here.

 

 

 

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