TDA recommends changes to higher education support bill
With legislation introducing an improved rate of repayment of student loan debt, TDA has called for current loan fees for FEE-HELP and VET Student Loans to be abolished.
The legislation sets a new lower income threshold of $44,999 for repayment of all student debt. TDA states in its submission to the Senate Standing Committee on Education and Employment that the loan fee of 20 per cent for VET Student Loans and 25 per cent for FEE-HELP loans is no longer justified.
“Presumably the loan fee was introduced because of lower than expected repayment rates from students accessing these schemes, but the lower earnings threshold blows this logic apart.” TDA chief executive Craig Robertson said.
The TDA submission goes on to say that the loan fee, only paid by VET students or private higher education students, is a discriminatory tax.
“It can only be described as a regressive tax measure given these students are effectively paying for the unpaid debt of university students,” Mr Robertson said.
TDA’s submission also raises concern that the lower repayment threshold will impose a burden on lower-income graduates.
The legislation also spells out protections to university students who, for special circumstances, are not able to complete a unit once a census date is passed. This protection is now consistent across all loan schemes. TDA issues a warning, however, that all schemes still place obligations on students to complete their education during the period assigned and published for each unit.
“Failure to recognise this key attribute of loan schemes may have the Commonwealth unilaterally accepting cases from students who simply did not get around to completing within the period for the unit for which they received a loan.” Mr Robertson warned.
Information about the bill is available on the committee’s website.