A new study has found that proposed changes to Australia’s tertiary education system could leave engineering graduates paying off their tuition fees until well into their 40s.
The latest modelling by Australia’s tertiary sector indicates that the Abbot government’s proposed changes to higher education will result in surging tuition fees for engineering students and a potential long-term debt burden once they graduate.
Research conducted by Universities Australia, the peak body representing the country’s tertiary sector, indicates that future engineering students will be left with an education debt of as much as $113,170 once their schooling concludes, assuming additional fees of $23,923 are heaped upon the current tuition rate of $37,319, and interest is charged at a rate of four per cent, resulting in further payments of $51,928.
The scenario posited by Universities Australia (UA) assumes that a “medium fee” level is maintained following de-regulation – approximately halfway between the higher fees paid by international students and the minimum fees that universities must levy in order to make up for the proposed reduction to the commonwealth contribution for Australian students.
According to UA’s models, budding engineers may be left paying their education debts for as long as a quarter of a century, assuming that future graduates enjoy an initial income of $56,000, rising to around $90,000 following 13 years in the full-time workforce.
This compares to the 18 years it currently takes graduates to repay their Help debt of nearly $50,000, with indexation at the consumer price index.
Universities Australia has urged the Abbott government to reconsider the proposed changes to the interest terms for student loans, as well as a cut to commonwealth contributions which is expected to be 20 per cent on average.
Belinda Robinson, the chief executive of Universities Australia, said the changes “could be expected to result in students facing debts and longer repayment times than needs to be the case in a more competitive fee-deregulated environment,” with ramifications for family formation later on in life.
“This modelling shows that parents taking time out to work part-time to raise children would be particularly hard-hit by the new arrangement,” Robinson said.
Not everyone in the tertiary sector accepts UA’s conclusion, however, with the University of New South Wales censuring the modelling as failing to properly address the differences in cuts to various disciplines, making it difficult to predict the extent to which fees will change.
The Group of Eight, comprised of Australia’s leading tertiary institutions, has also come out in support of reform, with executive director Michael Gallagher stating that the current state of education in Australia was not viable, and that opponents to change would likely “find themselves on the wrong side of history in resisting efficiency improvement and innovation.”