Daniel Hurst, Guardian Australia political correspondent
theguardian.com, Sunday 1 June 2014
Despite website information, education minister now says only new students will pay higher interest rates
Christopher Pyne: 'Anybody who was enrolled before May 14, nothing will change in terms of their arrangements.' Photograph: Daniel Munoz/AAP
The education minister, Christopher Pyne, has muddied the waters again over the impact of the government's higher education changes, suggesting only new students would pay higher interest rates on their loans.
Guardian Australia reported last week the education department had amended its website to clarify that the planned increase to the interest rate on Higher Education Loan Program (Help) debts would also affect former students.
During an interview with the ABC on Sunday, Pyne said he was confident competition would ensure universities did not increase their fees to “exorbitant” levels after deregulation, pointing out that seven vice-chancellors had already announced they would not charge students enrolling this year any new costs.
The interviewer, Fran Kelly, said: “Just to be clear, though, those students who are enrolling now or next year, they will be repaying their Hecs [Help] debt at the higher rate, though, won't they?”
Pyne replied: “Well anybody who was enrolled before May 14, nothing will change in terms of their arrangements.”
Kelly pressed the point: “So the Hecs debt will always stay at CPI into the future until it is paid off?”
Pyne said: “They are grandfathered until they finish their courses, which is by 2020 I think in most cases. Anybody who enrols from 1 January, 2016, will face the new arrangements from the time they enrol. Anybody who enrols between the budget and 31 December next year will face the new arrangements from 1 January [2016] and the current arrangements until that time.”
The confusion appears to have arisen because different elements of the higher education reforms are phased in differently.
The government plans to change the arrangement in which student loans are indexed in line with the consumer price index, currently 2.9%. From June 2016 annual indexation at the 10-year bond rate, capped at 6%, “will apply to all Help debts (including those incurred by former students, continuing students and new students)”, the government's website says.
Although the new interest rate will apply to all existing Help debts from June 2016, students already enrolled in university at the time of the federal budget on 13 May will be protected from a separate measure: the deregulation of student fees in January 2016.
Pyne was describing the implementation of the deregulation of fees in response to questions about the indexation of student loans.
The Greens' spokeswoman on higher education, Lee Rhiannon, said Pyne's comments were clearly contradicted by the government's own website.
“Either Mr Pyne deliberately lied or he doesn't understand his own policy changes,” Rhiannon said.
“These changes will see graduates who have finished their studies and are now in the workforce pay thousands more in interest repayments on their student debt.”
Labor’s higher education spokesman, Kim Carr, said people were “right to feel confused, fearful and betrayed” at the minister’s misleading comments: “How can Mr Pyne ever understand how much his government is hurting students if he doesn’t understand his own policies?”
Pyne’s spokesman said: “The minister was referring to any changes in fees not impacting existing students. The change to the amount of interest charged to reflect the same interest rate the government pays to borrow the money will be applied to Help from June 2016. This change means that taxpayers will no longer be paying higher interest for Help loans than graduates pay back.”
Tony Abbott has previously faced criticism for muddying the message on the impact of the deregulated fee structure.
The prime minister said in a radio interview in May that students who started their courses next year would not face changes to their conditions of study throughout their course – even though the budget said the removal of the caps would apply “from 1 January, 2016, for students who accept an offer to commence a course from 14 May, 2014”.
The government is yet to present legislation to implement the higher education changes, but it faces a tough battle securing Senate passage, with Labor, the Greens and the Palmer United party all signalling their opposition.
University vice-chancellors have started to quantify the impact of the government's planned reduction in its contribution to the costs of university courses. The University of Melbourne says fees would need to rise by 45% to make up lost funding in social science disciplines, 54% in science and 61% in engineering.
Pyne argued competition among universities and non-university providers, such as private colleges, would ensure they had to offer a high quality service to attract students.
“The market will make sure that the university fees aren't exorbitant because if universities charge exorbitant fees, they won't get any students. It is just the same as any other service,” he told the ABC TV's Insiders.
The minister said under his reforms 80,000 more students would go to university, as the government was extending Commonwealth grant scheme funding for sub-bachelor programs used by low socioeconomic-status students as a pathway into further study.
Christopher Pyne adds further confusion to student debt loans debate | World news | theguardian.com
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