Education, Science and Training
Our Universities — Higher Education Loan Programme
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of Education, Science and Training | 11.7 | 28.1 | 29.9 | 26.3 |
| Related expense ($m)(a) | ||||
| Department of Education, Science and Training | -1.1 | -1.9 | -2.6 | -3.1 |
| Related capital ($m) | ||||
| Department of Education, Science and Training | - | - | - | - |
- A negative number for expenses indicates an increase in the fiscal balance.
The Government will implement a number of changes to the Our Universities: Backing Australia’s Future package that was announced in the 2003-04 Budget. From January 2005, the Government will apply a 20 per cent loan fee with CPI indexation to the new FEE-HELP and OS-HELP undergraduate loans. The change replaces the previously announced indexation arrangements and will result in $89.4 million in additional revenue over four years.
In addition, from July 2004, the income threshold at which repayments commence for all current higher education loan schemes will increase from $25,348 to $35,000. This will result in increased revenue from indexation of loans of $9.6 million over four years because of the expected reduction in loan repayments.
The Government will also revise the maximum student contributions levels for Australian Government supported places from 30 per cent to 25 per cent above the standard HECS contribution rates (except teaching and nursing where the maximum fee will not increase). The new lower maximum contribution will decrease the value of loans issued and reduce expenses by $8.7 million over four years, because the value of upfront discounts provided to students will be lower. Revenue from indexation of loans will also be lower by $3 million over four years as a result of this change.
Under accepted accounting practice, the amount loaned to students is treated as a financial asset and therefore does not impact on the fiscal balance. Payments by students of the indexation component under the Higher Education Loans Programme are treated as interest revenue and impact on the fiscal balance from 2005-06.