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Budget 2014: The $120,000 uni degree
A deregulated system for paying university fees will cost students up to three times as much, leaving graduates with a debt to the tune of $120,000-plus, says the architect of the HECS student loan scheme.
According to the Federal Budget announced on Tuesday, universities will now be able to set their own course fees from 2016 and real interest will be applied to student debts for the first time.
Fairfax Media spoke with Bruce Chapman, the education economist behind HECS, who fears the fees will go up "significantly".
''I expect most universities will increase tuition fees to international student fee levels, which are currently about three times higher," he was quoted as saying, "The Group of Eight universities will do that pretty quickly."
Professor Chapman said the government's plan for students to pay interest on loans up to 6 per cent - depending on the government bond rate - was unfair.
He also said it was quite likely the cost of a bachelor of medical science would rise from $24,000 to $120,000. This is the fee for international students at the University of Sydney.
Breaking down the Budget: Are you better off or worse off?
Who will be the worst hit?
Uni drop-outs who start out in low-paying jobs or women who delay paying back their debts after their maternity leave would be the worst hit from the move, Professor Chapman said.
The new interest charges may also deter students from entering university in the first place, he said.
But not everyone thinks it’s a bad deal. Ian Young, the Group of Eight universities chairman, told Fairfax that the extension of Commonwealth support to TAFEs and private colleges will bring back .
''If universities want to charge a premium, they will have to convince students there is a real benefit to what they offer. This will keep us on our toes and force us to innovate, '' he was quoted as saying.
In more bad news for the youth, unemployed people under 30 years of age will now face a six-month wait for benefits, which have also been slashed.
