The total student debt owed to the government is set to nearly triple within a decade, in part because of federal plans to let universities set their own fees. According to parliamentary budget office report figures released on Wednesday the annual cost of the Higher Education Loan Program (Help) will increase from $1.7bn in 2015-16 to $11.1bn in 2025-26. This means in the next decade the total amount owed to the government will rise from $13.4bn to $48.1bn. The PBO report blamed the increase in student debt on the decision to uncap university course places; on Labor’s decision to extend loans to vocational education; and the Coalition’s plan to deregulate university fees. It said the amount of doubtful debt, which is not expected to be repaid, is projected to increase from $1.9bn in 2015-16 to $4bn in 2025-26. That’s an increase of loans not expected to be repaid from 19% of new loans this year to 21.8% of new loans in 2025-26. An investigation by the ABC, based on the education minister’s incoming ministerial brief, calculated the government is forecasting losses of more than $13.5bn on just four years’ worth of loans between 2015-16 and 2018-19. It comes a week after the Grattan Institute found default rates on government education loans have increased, due to a massive uptake of loans for vocational education and training, including courses pushed by “unscrupulous education providers”. The PBO assumed that if the government decreased its subsidies to universities and deregulated university fees, there would be a one-off increase in fees of 40%, followed by annual increases of 2% thereafter. The PBO report said earlier budget costings tended to underestimate the true cost of student debt because they did not include estimates of doubtful debt and the cost of the government paying interest on borrowings to pay for student loans. Student debt will rise from 4.8% of total government debt to 18.3% in 10 years’ time. At a press conference with the prime minister on Tuesday, education minister Simon Birmingham said: “The irresponsible and recklessly-arranged [vocational education and training] fee help program has contributed dramatically to the type of debt we are dealing with in terms of student loans”. “We need to make sure [that] in higher education, as in schools right across the country, our promises and our policies are affordable. That’s what we will do.” The shadow higher education minister, Kim Carr, said the PBO costings showed “the Liberals’ plan for $100,000 degrees is fiscally reckless and would undermine the sustainability of the whole [Help] system”. “Today we see more evidence that the Liberals’ plan to Americanise Australian universities is not only bad for students, it’s also bad for the budget and bad for Australian taxpayers,” Carr said.
A report from the Australian Parliamentary Budget Office reveals that the total student debt owed to the Australian Government is expected to nearly triple from AUD 13.4bn ( $ 25 ) to over AUD 48.1bn ( $ 36.3bn ) by 2025 . The rationale for the increase is cited as being partly due to federal plans to allow universities to set their own rates and government 's decision to extend loans to vocational education . This news comes a week after the Grattan Institute revealed default rates on government education loans had risen due to a significant uptake on loans for vocational education and training , including courses pushed by “ unscrupulous education providers . ” Shadow higher education minister , Kim Carr warns the " plan to Americanise Australian universities is not only bad for students , it ’s also bad for the budget and bad for Australian taxpayers . ” In the US , the student debt crisis has become so large , it has captured the attention of presidential candidates who are looking for ways to make college more affordable in an environment of dwindling state funding for higher education and rising college costs .