NTEU | 20 October 2014
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The National Tertiary Education Union says that dropping the highly controversial proposed “real interest rat”e on university student debts will have little impact on student debt levels.
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NTEU analysis shows that while removing interest from HELP debts will marginally reduce the cost and the time it takes to pay off HELP debts, it is the amount students will be required to borrow or the cost of their degree which will be the most important factor determining the size of their debt and how long it will take students to repay their student debt.
The NTEU posited a debt scenario based on an accounting student paying $75,000 for the degree (more than twice the current price). Assuming six years out of the workforce almost a decade after graduation, the NTEU scenario has the debt repaid “only” seven years earlier if a real interest rate does not apply.
Jeannie Rea, NTEU National President said uncapping university fees has nothing to do with ‘setting our universities free’ but everything to do with reducing government spending on our universities:
“We need only look at the complete policy and market failure deregulation of vocational education and training is having in Victoria to understand what a big mistake deregulation of higher education would be.
“Education is far too important to be left to the market. We are urging the Senate to reject the Government’s legislation and we encourage the Minister to then sit down with all stakeholders to develop a plan to invest in higher education,” Rea concluded.
See
Different interest rate scenarios for HELP