Cost of the university loans scheme has ballooned to more than $30 billion

In Australia, lots of students at undergraduate and postgraduate level take loan from the Higher Education Loan Programme (HELP) that provide interest free loans to students. Recently, as reported by the Government, the debts of quite a few students have touched the six digit mark. For example, the Daily Telegraph reveals that the some of the sample debts of students are $313,308, $200,743, $244,198, $413,252, and $248,078, taken under the HELP. Put together, the total debts under this scheme amount to more than $7 billion, and most of is marked as ?doubtful? by the banks, and eventually, these loans may not be recovered in the future. According to bank officials, the reasons behind this increasing amount of unrecovered debts are that many students travel overseas or get deliberately dropped out of the university courses. Even, there are instances where students intentionally keep their salaries below the $51,309, which is the thresholdsalary, above which one has to start repaying student loans. Experts feel that the low recovery rates of loans given under this HELP is because now university education to some extent has become demand-driven, as the Federal Government is determined to meet the target of ensuring that 40% of 25-34 aged Australians should have a bachelor degree by 2025. Eventually, there are students who are coming to university education to take undue advantage of such programmes.

The recent figure shows that the on an average each university student in Australia has a debt of $16,000, but as per predictions, it is going to rise to $19,500 in 2016-17. The data from the Department of Education shows yearly hike in the HELP, as in 2012-13 it was $1.6 billion. Although there was some speculation that the Government is planning to privatize this programme as the burden is becoming too much to handle, a spokesman of the department of Education stated ?there are no plans on the part of the government to bring privative investments to run the scheme or even, sell the huge amount of debts generated by the program?. He also added that according to their predictions the proportion of unpaid debts is going to stabilize at 16% to 17% for the next financial year and the Government is equipped for it, as the Government in its recent budget made provision for handling 22% default rate.

The recent data from the Government shows that Wollongong and Baulkham Hills in the northwest Liverpool in the southwest of Sydney, Newtown in the west, and Wentworthville in the western portion ofthe suburbs are found to have the highest number of student loans. Students of Arts and Design courses are the lowest paid, on an average $40,000, as revealed in a recent survey by Australian Graduate Survey. The Government is also thinking of recovering loans from students who are currently based in other countries, but this is not going to be that easy as taking any legal step in this kind of a situation becomes that much more complex and expensive.

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