Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Hansard source

I thank Senator Reynolds for her question and her commitment to higher education access on fair terms for all Australians. Since 1989, the income contingent loan scheme in Australia, known as HECS or HELP, has been groundbreaking in terms of world recognition as a leading way of providing fair, equitable access for all Australians wanting to obtain university education without any up-front fees. Since that time, student numbers have tripled. Indeed, since 2009, when the demand-driven system was introduced for Australian universities, Commonwealth supported places have increased by a further one-third.

But, equally, since 2009, outstanding loans have increased from around $20 billion to over $50 billion. Around 12 per cent of total Commonwealth gross debt is now a student loan under the HELP scheme. That is why the Turnbull government is proposing changes to the loans scheme. There will be a new threshold of $42,000 and a new, lower first repayment step at one per cent—notably, one-quarter of what was proposed by the Grattan Institute—and higher rates of repayment for higher income earners. This is about ensuring the sustainability of the HECS and HELP scheme. As the respected economist from the ANU and architect of the HECS scheme, Professor Bruce Chapman, said earlier this year:

The evidence is now overwhelming that changes to the level of the charge, or other aspects of HECS-HELP, such as the first threshold of repayment, have no discernible effects on student behavior or choices. This has been true for all Australian experience with HECS, including its introduction in 1989 …

In fact, in that time, participation has only gone up and participation by all equity groups—all those from different areas of disadvantage—has gone up by a dramatic level. It is a success, but it is critical we guarantee its viability and sustainability into the future— (Time expired)