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Universities united over student debts proposals

Fairfax Media    |   5 June 2014

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Although vice-chancellors are divided on the issue of fee deregulation, a Fairfax Media poll reveals the Commonwealth government faces blanket opposition from university vice-chancellors to its plan to increase the interest rate on all student debts to up to 6% and slash university funding by 20%.

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These measures have sparked criticism from many university leaders who would otherwise have rallied behind the Fee increase2government’s plan to deregulate university fees. Peak body Universities Australia is calling on the government to rethink both policies. Giving ground on these measures could help the government win broader support for its reform package, which faces a hostile Senate.

University of Technology Sydney vice-chancellor Ross Milbourne said

I don’t think any vice-chancellor in the country supports the move to increase the interest rate on HELP debt.

Deakin University vice-chancellor Jane den Hollander said it was ”punitive and unfair” to link the interest on student debts to the 10-year treasury bond rate rather than inflation.

Compound interest will have many unintended consequences: the poor will acquire more debt, while others will be indifferent to course fees as they simply defer payment, never work or leave Australia.

UNSW acting vice-chancellor Iain Martin said fee deregulation is needed to avoid an inevitable decline in the quality of Australian universities but added:

We are surprised and concerned at the extent of the reduction in the government contribution to the cost of a degree, and the significant burden that will place on students.

University of Canberra vice-chancellor Stephen Parker, an opponent of fee deregulation, said the proposed changes would be ”unfair, unethical, reckless [and] poor economic policy”.

Victoria University vice-chancellor Peter Dawkins offered a set of ideas to improve the government’s package including: indexing debts to inflation until students graduate; putting a cap on the size of student debt; and offering greater government subsidies to low-income students.

Flinders University vice-chancellor Michael Barber opposed the interest rate changes, saying:

I believe students will end up with debt levels that are as high as America, and we don’t want to see that here.

 

 

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