The Government Wants Students To Pay Their Student Loans Off While They're Studying

Students might have to start paying back their HECS/HELP loans while they're still at uni.

Hidden away, among thousands of numbers in the 2016 Budget, there's one sentence that will terrify uni students and graduates.

Luis Enrique Ascui / Getty Images

Here it is...

Australian Government / Via docs.education.gov.au

Is says: "to improve repayments from [low-income students who live in high-income households], it has been suggested that a household income test be introduced".

Buried on page 22 of its 'Driving Innovation, Fairness and Excellence' discussion paper is the one and only mention of this "household income test" in this year's Budget. It's kind of like they didn't want anyone to find it.

Australian Government / Via docs.education.gov.au

So, what's a household income test?

It's a measurement of how much money your family makes each year.

Family in this instance, means either your parents (if you live with them) or your de-facto.

So your income + your family's income = total household income.

For a case study, let's look at how the proposed changes would affect "Malcolm".

Stefan Postles / Getty Images

He’s 25 and is studying a three year Commerce degree.

Malcolm has a casual job but doesn't earn anywhere near enough to meet the $54,126 per annum threshold to start paying back his student loan.

But Malcolm also can't afford to pay rent in Sydney, so he lives with his parents (who can't afford to buy him a house).

That means their income gets included in the overall "household income test".

Both Malcolm's dad, who is a cleaner, and his mum, who stacks shelves at a supermarket, earn the minimum wage of $656.90 per week, or $34,158.80 a year.

Their combined income is $68,317.60, which pushes Malcolm over the HELP repayment threshold.

Bad news, Malcolm. You'll have to start paying back your student loan while you are studying. That sounds a lot like up-front fees.

Why does the government want to make changes to higher education contributions? Because it estimates unpaid student debts will hit more than $70 billion by 2018, so it wants to make grads start paying back what they owe sooner.

stephanie @stef_a_nee__t

Life tip: Don't look at your HECS debt before bed

02:33 PM - 12 Apr 2016

The government has also proposed lowering the repayments threshold to $50,000.

At this stage, both the household income test, and the lower threshold, are just government proposals.

Don't expect to get a clear higher education policy from the government anytime soon.

Dan Himbrechts / AAPIMAGE

Education minister Simon Birmingham has confirmed the Turnbull government won't be taking a higher education policy to the federal election.

Instead, the government will consult with the sector and wait until late 2016 or early 2017 to announce its reforms. It plans to make its higher education changes in 2018.

Bad news for anyone planning on going to uni in two years.

One thing we do know is that full fee deregulation, as proposed by the Abbott government in 2014, is off the table. The Coalition couldn't get that through parliament, twice.

Luis Enrique Ascui / Getty Images

“Our options paper clearly details that the Turnbull government will not pursue full university fee deregulation – it is ‘off the table’,” Birmingham told BuzzzFeed News.

Instead, the government is proposing partial deregulation, where universities can charge more for some degrees, which it says it will introduce after consulting with stakeholders.

"There is a mature and constructive conversation to be had about reforming higher education to ensure that it is fundamentally fair and sustainable and encourages innovation, differentiation and collaboration," Birmingham said.