Student debt climbs to record $26 billion

Updated

University students owe the Commonwealth a record amount of money, with a new report estimating more than $6 billion worth of student loans are never expected to be repaid.

The Grattan Institute report has found current and former students have accumulated Higher Education Loan Program (HELP) debts of $26.3 billion, up almost $10 billion since 2007.

The report estimates that of that figure, $6.2 billion is never expected to be paid back.

The institute's Andrew Norton says many students are not expected to earn the $49,000 a year required before HELP loans need to start being repaid.

He says another reason is that students are earning more than $49,000 but have moved overseas.

"They're living overseas and the system doesn't catch them," he told ABC News Breakfast.

"So that's why they are guessing, based on recent behaviour, that this a long-term consequence of lending this much money."

He says the Federal Government should follow the lead of New Zealand and England and attempt to recoup the money from Australian graduates who work overseas.

"It is definitely worth investigating," he said.

"The Government has said it is problematic and difficult to try and get people working overseas to pay their loans ... but if other countries can do it I assume Australia can as well."

Mr Norton says the Government should also consider things like a loan fee to try and recoup the money.

"They have a loan fee for full fee students in undergraduate colleges. I can't see why only that small group should pay a loan fee and not others," he said.

But he says the debt figures are not necessarily a negative thing.

"I think it's a symptom of success in the Australian system. The HECS system was designed to expand access and that's what it's doing," he said.

"Participation has more than doubled since the scheme was set up just over 20 years ago.

"Just the natural consequence of more students is the debt goes up.

"And also we're seeing a long-term increase in student satisfaction with teaching.

"We don't know how that directly translates into learning more, but there's a better learning environment than there used to be."

Topics: university-and-further-education, education, federal-government, australia

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