Right now, your head’s filled with half yearlies. You’re either memorising essays, trying to wrap your head around algorithms or knee-deep in your major work.
You haven’t got time to think about what’s going on in the world, let alone to sit down and attempt to digest what all of this budget talk means. Let your parents worry, the budget’s not going to affect you anyway…
In the last month, the Abbott government has served up a budget that features some of the biggest education shake-ups we’ve seen in a long time. And if it gets pushed through the Lower House (remember that green room you visited in primary school on your trip to Canberra?) in its current state, it’s going to be a game changer.
So, we’ve waded through the jargon and pollie speak to give you a no-nonsense snapshot of what the budget means for you.
It’ll only take you 15 minutes to read, and could very well determine what you decide to do after school (yes, that time will eventually come).
So take a quick break from cramming and find out how the budget is likely to affect you.
Generally speaking, the budget measures will mean:
The budget has proposed the deregulation of university fees, which basically means that as of 1 January 2016, universities can charge students (you) whatever they like when it comes to tuition fees.
The idea is to make universities more competitive in their quality of teaching so that you walk away with a superior education. As it stands currently, Australia doesn’t have a single university that is ranked in the top 20 of the World Reputation Rankings. By deregulating fees, the government hopes to change this.
The government says that it is too soon to speculate what unis will charge. Fees could go up or they go down, but unis won’t be able to get away with charging anything too outrageous.
But experts are warning otherwise. Many are saying that it’s realistic to expect that this move will push fees up.
Don’t forget universities are also businesses. At the end of the day, they need to generate profit. It seems likely that this will see them charging more for courses that are popular (think law, arts, communications, medicine), or if they command a prestigious reputation.
Under the current scheme, if you secure a Commonwealth Supported Place (CSP), it means that you and the government split the bill when it comes to your tuition. You pay roughly 41 per cent of your uni fees, and the government foots the bill for the rest.
It’s not a bad deal, right?
Under the new federal budget, the government is looking to reduce their contribution to CSP, meaning you’ll be paying closer to 61 per cent of the total cost of your fees.
Most of you won’t have the cash to pay your uni fees upfront. So this is where the Higher Education Loan Program (HECS-HELP) comes in handy. It’s basically a student loan that allows you to study now and pay later.
Currently, there’s no interest charged on HECS-HELP loans. Instead your debt is indexed each year in line with the Consumer Price Index in order to reflect changes to the cost of living.
If the budget legislation is passed in its current state, this will no longer be the case.
Your HECS-HELP loan will instead accrue interest of up to 6 per cent. This is in accordance with the 10-year Treasury bond rate, which is basically the interest rate the government is charged for borrowing money.
The budget also outlines changes to when you need to start making repayments on your HECS-HELP loan.
Under the current scheme, you have to start repaying your loan once your income hits $53,345. Come 2016, however, you’ll need to start repayments when your income reaches $50,638.
If you’re studying with an approved private institution or go on to do a postgraduate degree at uni, you’re likely to want to take advantage of the FEE-HELP scheme.
Currently, there’s a lifetime limit to how much you can borrow with FEE-HELP. Medicine, dentistry and veterinary science students can borrow up to $120,000, while everyone else can borrow a maximum of $96,000 to help them pay for tuition.
As of 1 January 2016 however, the government will remove this limit altogether, meaning you can borrow as much as you need.
The budget has proposed introducing a new Commonwealth Scholarship scheme to help students from lower socio-economic backgrounds head to uni.
Universities and higher education institutions will be required to redirect 20 per cent of additional revenue towards funding this scheme. The scholarships will go towards helping eligible students with fees, living costs and study guidance.
Toying with the idea of a TAFE qualification? Listen up, the following will apply to you.
As a TAFE student, any government financial assistance you receive is via a scheme called VET FEE-HELP. As it stands, there’s currently a $96,000 limit on how much you can borrow in your lifetime to help you pay off TAFE tuition fees.
Under the new budget, this limit is set to be uncapped. As of 1 January 2016, you’ll be able to borrow as much as you need to pay for fees.
The government’s budget has outlined measures to increase the number of TAFE courses that are Commonwealth Supported Places.
This basically means that if you’re studying a diploma, advanced diploma or associate degree you could be eligible to have the government foot 40 per cent of your course fees. The move is subject to legislation being passed, but if it gets through, it will come into effect from the beginning of 2016.
If you’re keen on completing a trade, there are a few things the budget will change for you:
This scheme was set up to give you up to $5,500 in tax-exempt payments throughout your apprenticeship for any tools or training you might need. Say you’re a chef, the scheme will help you pay for your knives and chef whites. If you’re a plumber, it’ll help fill your toolbox and go towards your training.
Under the new budget however, the government is looking to replace this program with the Trade Support Loan instead (see below).
As of 1 July 2014, apprentices can access a Trade Support Loan totalling up to $20,000 over the course of four years to help cover training, tools and other costs associated with their apprenticeship.
Unlike the Tools For Your Trade payment, this is a loan that will incur indexing (in line with the Consumer Price Index) and needs to be repaid once you start earning $53,345 a year. So rather than having cash to pay for knives or your toolkit, you’ll receive a loan.
To be eligible, you’ll need to be completing a certificate III or certificate IV qualification that leads to an occupation listed on the National Skills Needs List.
If you successfully complete your apprenticeship, you’ll also receive a 20 per cent discount on the amount you owe.
Taking a gap year often means coming home well travelled, more cultured … and completely broke. If you struggle to find a job and need help getting by through Centrelink, you should know about the government’s plans to change the welfare system.
Starting next year, you will need to be 25, rather than 22, to receive Newstart.
For those of you under 25, you’ll be receiving Youth Allowance instead – a payment that’s $96 less per fortnight than what Newstart would give you.
The government is also looking to introduce a mandatory waiting period before you receive either Newstart or Youth Allowance. This is subject to whether you’ve worked before, with the minimum wait being one month and maximum wait being six months.
Once the wait period is over, you will be able to receive income support for six months.
During this time, you must participate in the Work for the Dole scheme, which involves completing at least 25 hours of community projects every week. The amount of Youth Allowance or Newstart you receive will be subject to your commitment to the program.
Basically, receiving the dole will no longer be an ongoing process like before. Following the wait period, you will have access to income support for six months in a 12-month period, while you participate in the Work for the Dole initiative. If during this time you’re unsuccessful in your job search, you will need to wait a further six months before receiving more support.
This cycle continues until you either find a job or turn 30.
That’s it, basically – some key pointers from the 2014 federal budget in a nutshell. Armed with this info, you’ll actually be able to understand what Hockey and Abbott are going on about, now, when they start talking budget.
Remember, these changes still need to be passed through parliament, before they’ll come into effect. So keep your ear to the ground. Next time you hear the word ‘budget’ on the news, turn up the volume.
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