A $50 million plan to reform the federal student loan repayment system has come under fire from some students who say it will hurt them, including those who are already struggling with high debt.
Key points:More than 60,000 students are on the waiting list for the first loan repayment programThe plan aims to bring down student loan debt by 50%The government says it’s not a bailout but will reduce costsThe plan will cost taxpayers more than $100 billion and take a decade to roll outThe government will unveil its new student loan program on Thursday, as part of a $50 billion package for education.
The government said it would introduce the first new loan repayment plan in almost three years, starting with people on the waitlist for the government-funded national student loans.
“We’ve had a huge number of young Australians who have been waiting years and years and months for a loan, and now they’re finally getting that opportunity to start to pay it off,” Treasurer Scott Morrison said.
“It’s really exciting.”
What we know about student loans and how to get them:What we already know about Student loansThe program will allow people who can’t find work or a job to borrow from the Federal Government.
It will be administered by the Department of Education and Training, with loans coming in two different types, student loans that are funded by the Government and student loans paid by the Commonwealth.
The first will be made to students who do not have a job and cannot repay it, while the second will be for people who have a Jobseeker’s Allowance (JSA) to help them pay for their student loans when they need it.
The Government is also offering up to $10,000 for those who can repay the first installment of their loans over two years.
Under the plan, the repayment amount would be based on a number of factors, including income and household size.
“The more debt you have, the more it will cost you, it’s a real barrier to accessing your degree,” Ms Morrison said, adding that those on the government’s waitlist would receive their first payment as soon as they can.
“Our goal is to help these people, but we have a long way to go.”
Who is on the federal Student Loan Waitlist?
The Government has set a target to reduce student debt to $150 billion by 2020, but the amount on the national student debt list has been rising steadily over the past three years.
It is estimated that more than 60% of Australians on the list are under 25.
About half of those who need assistance currently have student loans to pay.
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