Australia

Govt pushes students to repay debt sooner

University graduates will find themselves repaying student debts earlier if the federal government can convince parliament to back new legislation.

The Turnbull government is pushing ahead with plans to make university graduates repay their student debts sooner.

The legislation to cut the HECS-HELP repayment threshold from $55,000 to $45,000, among other measures, was introduced to parliament on Wednesday.

The move was flagged in December's mid-year budget update, and is an easing of what the government originally wanted to do - cut the threshold to $42,000 - with its higher education changes included in the May 2017 budget.

That original package was stalled in the Senate and will now be dropped.

The cut to the repayment threshold was expected to save the budget $245 million over the next four years.

The bill also includes a new lifetime limit on how much students can borrow from taxpayers of $104,440, or $150,000 for medicine, dentistry and vet science students, saving another $10 million.

Assistant education minister Karen Andrews said Australia had to make sure its higher education system was more sustainable.

"The policy measures will ensure that Australia's world-leading, income-contingent student loans system can continue to be available to future generations of students," she told parliament.

"The measures in this bill are proportionate and they help achieve that goal."

The government wants the new threshold to pass parliament and come into effect from July 1, but it may face a hurdle in the Senate where Labor, the Greens and several crossbenchers were hostile to previous efforts to make changes.

In December, the government announced it would achieve the bulk of its $2.5 billion cuts to universities by freezing the amount of per-student funding for 2018 and 2019, bypassing parliamentary approval.

The sector was shocked by the move, which it said could lead to 10,000 fewer young Australians being able to attend university this year.

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