As a super fund with a large number of teachers in our membership, we are always very interested in announcements that affect the education sector.
The budget was something of a mixed bag for schools and students. It included an extra $18.6 billion in school funding over the next ten years. But the news was less positive for uni students, who will be hit with higher fees and a lower income level before their HELP loan repayments begin.
Here’s a snapshot of the proposals.
Added school funding
It’s proposed that schools will receive $18.6 billion in extra funding over the next ten years distributed according to a needs-based model. All schools will transition over 10 years to a fairer, consistent share of Commonwealth funding - 20% of the funding standard for government schools and 80% for non-government schools.
The priorities for reform will be the subject of a new review chaired by Mr David Gonski, which will conclude by December 2017. If approved, this proposal means that funding for each student will grow at an average of 4.1% annually.
'Our schools funding package delivers a fairer and simpler way to meet our shared commitment to educate each and every child' - Treasurer Scott Morrison
Higher university fees
University students will be affected by funding cuts designed to save the budget $2.8 billion over the next four years. This means the cost of a four-year degree will rise 7.5%, which can still be met through the Higher Education Loan Program (HELP).
Under the proposal, students will pay an extra $2,000 to $3,600 for a four-year course. Fees will increase by 1.8% each year for four years or 7.5% over the four years to 2021.
For example, a nursing student who commences a four-year course in 2018 will see fees increase by $1,250, from $26,550 to $27,800. The most expensive course, a six-year medical degree, would cost $75,000.
Changes to HELP loan repayments
The income level at which students will start repaying HELP loans will be reduced. Currently, students start to repay debt when they earn more than $55,000. But from July 2018, students must repay their loan when their income reaches $42,000 a year.
So under the current system, an entry level nurse starting with a salary of $50,000 won’t begin to repay their HELP loan until their salary reaches $51,957. But under new rules they will repay at a rate of 2% because their income is over the $47,191 threshold.