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Palmer refuses to budge-t on fee deregulation

Christina White gives an update on the budget.

Photograph via AAP. Photograph via AAP.
Photograph via AAP.
Photograph via AAP.

Confusion over implementation of increases to student fees and HELP debt interest have prompted concern in the university sector, adding to opposition from students and the Palmer United party.

“If you start a course under one system you will finish it under one system,” Abbott said in May. However, fee increases under the government’s proposed deregulation would affect all students enrolling after budget night, May 13 2014, for fees incurred from 2016.

Last week Deakin University and the University of Western Sydney announced they would freeze fees for students for the rest of 2014, which means students enrolling any time this year will not face fee increases for the length of their degree.

The university sector is expecting 160,000 enrolments in the next 18 months, who are exposed to fee uncertainty if universities do not enter agreements to grandfather students from fee increases. The downside of such agreements is that they won’t prevent the government from reducing its contribution to course fees, and reducing public funding by 20 per cent.

Last week, Abbott did not rule out the possibility of universities doubling fees under a deregulated system. However, the Coalition government may be unable to pass the proposed legislation through the Senate as Clive Palmer has said he will vote against it.

In order to pass the legislation, the government needs six votes from crossbenchers and thus must acquire the support of the Palmer United Party when the new Senate sits in July. Labor and the Greens oppose the legislation, leaving eight senators for the Coalition to convince, three of whom belong to the Palmer United Party.

Palmer said that he supports the deregulation of fees for international students, but not their domestic counterparts. He has also called for ending the HELP scheme and replacing it with free tuition.

Pyne has suggested that only new students would pay higher interest rates on their loans. However, the government’s website states that “the new arrangements will apply to all HELP debts (including those incurred by former students, continuing students and new students) beginning with the indexation of debts on 1 June 2016”.

Under the new system, interest on HELP debt can increase above the rate of inflation (up to six per cent per annum). Currently, student loans are indexed in accordance with the consumer price index (CPI), which sits at 2.9 per cent.

Unlike the HELP system, university fees would be subject to change as of budget night, so any students enrolling after May 13 this year could face deregulated fees.

There was also confusion over a potential policy of collecting student debts from deceased students. Pyne suggested the idea last Wednesday, saying he had no “ideological opposition” to the idea, before Abbott ruled out the proposal the next day.

For more on broken election promises, see national media.