University fees deregulated

The 2014-15 Federal Budget has paved the way for universities to set their own fees, as well as reduced the threshold at which students begin repaying their HELP debt.

The government has cut the funding provided to universities for each course by about 20%, but has also committed to abolishing from 1 July 2016 the current caps which prevent universities across the country from hiking up the cost of degrees.

Students currently face fees of between $18,000 for a three-year humanities degree to just over $60,000 for a six-year medical degree. Average student loans are about $30,000.

Some analysts have suggested that this change could see some of Australia’s leading universities charging more than $100,000 for law and medical degrees when it comes into effect in 2016.

The HELP student loans scheme will continue to be offered, but graduates will repay their debts once they start earning $50,638, (down from $53,345 in the 2013-14 financial year). In another change, interest on student loans will be pegged to the government bond rate rather than to inflation. This means graduates will pay an interest rate of up to 6% rather than the current rate of 2.9%. This will affect all students from 2016, regardless of when they commenced their degree.

People studying diplomas or undertaking degrees at private colleges or TAFE from 2016 will also be able to access the HELP system.