Student debt balloons to A$28 billion, report reveals

By Geoff Maslen. Australia’s university students and their predecessors now owe taxpayers A$28 billion (US$29.4 billion) – a direct result of taking out government loans over the past 23 years to cover much of the cost of their tuition. A report released last Monday says that more than $6 billion of the money owed is unlikely ever to be repaid and is increasing each year. The report, Mapping Australian Higher Education, 2013, was published by the independent Grattan Institute in Melbourne. It estimates that the net interest bill on the debt now amounts to more than $600 million a year – equivalent to the entire annual budgets of many universities. Australia created the world’s first income-contingent loans scheme in 1989, to assist students in going to university by allowing them to borrow from the federal government to meet most of the cost of their tuition. This was on the basis that they would eventually repay the money, interest-free, over several years as a tax surcharge after graduating. Read more...