An increase of up to 7.5 per cent in fees for university students to complete their degrees might not seem like much – after all, the average private health care policy can go up by that much in a single year – but, for a young person starting work, it will have a big impact.
The uni fee changes outlined by Education Minister Simon Birmingham ahead of the Federal Budget’s release next week are the biggest to the student loan system in 10 years.
What it will ultimately do is add about $3600 to the cost of an average uni degree (by 2021), where the government says the maximum a student will pay in fees over a four-year degree is $50,000.
For students from regional and rural areas who attend university in the city, these changes could have an even bigger impact. They are already paying more with the added cost of accommodation.
Then there’s the flow-on effect from a lower repayment threshold, which will drop from about $55,000, to $42,000 from July 2018.
To what extent could this impact the housing industry? There’s all sorts of talk about home affordability being another Budget focus. How will young people save for a deposit on their first home if they’re being forced to pay out more for uni and earlier in their careers?
Will it mean more people will chose to study from a distance? We’re already seeing that phenomenon reflected in statistics from the University of New England, where more of its students are completing degrees online, rather than on campus.
Or will it mean more students undertake apprenticeships instead? It should be acknowledged this could go a long way towards addressing the skills shortages in some of our smaller centres. But are we just taking away the choice?
With youth unemployment skyrocketing, it’s becoming harder for young people to transition into full-time work from education, so under-employment is another issue when it comes to repayments.
Ultimately it means people could be just meeting the threshold for repayments, but not making significantly more.
A university education has come a long way – it used to be free and no doubt many of our readers were able to take advantage of this. Now our kids are paying dearly for the privilege and might not be given the opportunity to follow in our footsteps.