The government today introduced its legislation to increase the undergraduate FEE-HELP debt surcharge from 20% to 25%. For example, under the current system an undergraduate who borrowed $10,000 under FEE-HELP would incur a debt of $12,000. From 1 July 2010, if this legislation passes, they would incur a debt of $12,500.
I think we need to look at the cost and coherence of the HELP student loan system. There is possibly a case for increasing the surcharge. However, in the absence of a broader review I believe the Coalition should vote against this ad hoc and arbitrary measure.
As I pointed out when this idea was first raised, this targets most of the higher education providers offering students a second chance – the TAFEs and private feeder colleges (given the migration reforms announced on Monday, the non-public university education sector could be forgiven for thinking that this government is trying to put them out of business). Continue reading “Our incoherent HELP loan scheme”