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Tony Abbott kills off plan to recover unpaid student debts from dead people Tony Abbott kills off plan to recover unpaid student debts from dead people
(about 5 hours later)
Tony Abbott has ruled out recovering unpaid student loans from deceased estates, a short time after two senior ministers – Joe Hockey and Christopher Pyne – voiced their support for the idea.Tony Abbott has ruled out recovering unpaid student loans from deceased estates, a short time after two senior ministers – Joe Hockey and Christopher Pyne – voiced their support for the idea.
The prime minister's declaration ensures the government’s focus remains on its previously announced higher education reforms, including deregulating university fees and increasing interest rates under the loan program commonly known as the Higher Education Contribution Scheme (Hecs).The prime minister's declaration ensures the government’s focus remains on its previously announced higher education reforms, including deregulating university fees and increasing interest rates under the loan program commonly known as the Higher Education Contribution Scheme (Hecs).
Although the package was not expected to end the current practice of writing off student debt in deceased estates, Pyne told the Australian Financial Review he had no “ideological opposition” to collecting debts from the estates of students who still owed money under the Hecs scheme.Although the package was not expected to end the current practice of writing off student debt in deceased estates, Pyne told the Australian Financial Review he had no “ideological opposition” to collecting debts from the estates of students who still owed money under the Hecs scheme.
The education minister reportedly said the government would consider the move “down the track”. A spokesman for Pyne then began hosing down the idea by saying it was “not on the current agenda”.The education minister reportedly said the government would consider the move “down the track”. A spokesman for Pyne then began hosing down the idea by saying it was “not on the current agenda”.
Abbott took it a step further during an interview with ABC Radio on Thursday.Abbott took it a step further during an interview with ABC Radio on Thursday.
“I want to make it absolutely crystal clear this government is not going to change the existing rules and the existing rules in respect of university debts, fee help debt, Hecs debt are that they cease, they cease on decease, as it were,” he said.“I want to make it absolutely crystal clear this government is not going to change the existing rules and the existing rules in respect of university debts, fee help debt, Hecs debt are that they cease, they cease on decease, as it were,” he said.
Asked to rule out pursuing students to the grave, Abbott said: “They will not be pursued, no.”Asked to rule out pursuing students to the grave, Abbott said: “They will not be pursued, no.”
Earlier, Hockey appeared to support the idea. The treasurer said student debts should be treated the same as other unpaid loans and be recovered from deceased estates. Facing further questions in parliament on Thursday, Abbott said the government had “no plans, no plans whatsoever to collect student debts from dead people”.
“What we certainly intend to do is to make stronger efforts to collect student debts from living people, because that's what the taxpayers of this country have a right to expect,” Abbott said.
The prime minister’s comment appeared to be a reference to previously flagged efforts to pursue student debts from people living overseas.
Earlier, Hockey appeared to support the idea of pursuing unpaid loans after people died. The treasurer said student debts should be treated the same as other unpaid loans and be recovered from deceased estates.
“Look, it shouldn't be different to any other loan,” he told the Nine Network.“Look, it shouldn't be different to any other loan,” he told the Nine Network.
“It is only against the estate of the individual; it is not going to go across families and so on. And, look, that's the same as any other loan, any other mortgage that we have in our lives, and it wouldn't be any different. It shouldn't be any different.”“It is only against the estate of the individual; it is not going to go across families and so on. And, look, that's the same as any other loan, any other mortgage that we have in our lives, and it wouldn't be any different. It shouldn't be any different.”
Labor's higher education spokesman, Kim Carr, said the government's higher education policy was in “shambles” and a case of “making it up as it is going along”.Labor's higher education spokesman, Kim Carr, said the government's higher education policy was in “shambles” and a case of “making it up as it is going along”.
“We’ve got Christopher Pyne and Joe Hockey saying one thing, and Tony Abbott saying the complete opposite,” he said.“We’ve got Christopher Pyne and Joe Hockey saying one thing, and Tony Abbott saying the complete opposite,” he said.
“Australians would be right to be confused and concerned that this government has an education minister who can’t run his portfolio, a treasurer who doesn’t know how the Hecs system works and a prime minister who clearly has no idea how much his budget is hurting Australians.”“Australians would be right to be confused and concerned that this government has an education minister who can’t run his portfolio, a treasurer who doesn’t know how the Hecs system works and a prime minister who clearly has no idea how much his budget is hurting Australians.”
Carr said voters should not trust Abbott's guarantee that the government would not pursue unpaid student debts from deceased estates: “The form guide says that if Tony Abbott rules out death taxes on student debt, it’s more likely than ever to actually occur.”Carr said voters should not trust Abbott's guarantee that the government would not pursue unpaid student debts from deceased estates: “The form guide says that if Tony Abbott rules out death taxes on student debt, it’s more likely than ever to actually occur.”
The Greens' higher education spokeswoman, Lee Rhiannon, said collecting unpaid student debts from deceased estates would be “further evidence of the Coalition's cruelty”.The Greens' higher education spokeswoman, Lee Rhiannon, said collecting unpaid student debts from deceased estates would be “further evidence of the Coalition's cruelty”.
The idea was floated in April by the Grattan Institute’s higher education program director, Andrew Norton, who said the government could save more than $800m a year by 2017 if it recovered outstanding student loans from deceased estates and people living overseas.The idea was floated in April by the Grattan Institute’s higher education program director, Andrew Norton, who said the government could save more than $800m a year by 2017 if it recovered outstanding student loans from deceased estates and people living overseas.
Norton, who worked with a former education minister, David Kemp, on the separate government-commissioned report backing university fee deregulation, said this was because the budget accounted for a portion of student loans not expected to be recovered in the future as a current expense.Norton, who worked with a former education minister, David Kemp, on the separate government-commissioned report backing university fee deregulation, said this was because the budget accounted for a portion of student loans not expected to be recovered in the future as a current expense.
Norton suggested the government should stop writing off student debt in deceased estates when estates were worth more than $100,000. He told Guardian Australia: “You’ve only got limited funds you can spend on higher education and is this really a sensible use of $1bn?”Norton suggested the government should stop writing off student debt in deceased estates when estates were worth more than $100,000. He told Guardian Australia: “You’ve only got limited funds you can spend on higher education and is this really a sensible use of $1bn?”
Before Abbott’s definitive statement, Pyne told the Financial Review a policy change would need “proper safeguards”, such as a minimum age to ensure that the families of young people who died owing a Hecs debt “would not be penalised”.Before Abbott’s definitive statement, Pyne told the Financial Review a policy change would need “proper safeguards”, such as a minimum age to ensure that the families of young people who died owing a Hecs debt “would not be penalised”.
Signalling his in-principle support for the idea, Pyne said: “If an elderly person passes away with a Hecs debt, they wouldn’t be able to say to the bank, ‘We’re not paying back our mortgage,’ yet they are at the moment entitled to not pay back their Hecs debt.”Signalling his in-principle support for the idea, Pyne said: “If an elderly person passes away with a Hecs debt, they wouldn’t be able to say to the bank, ‘We’re not paying back our mortgage,’ yet they are at the moment entitled to not pay back their Hecs debt.”
The minister faces an uphill battle to secure Senate approval for his current package of higher education reforms, with Labor, the Greens and the Palmer United party all signalling their opposition.The minister faces an uphill battle to secure Senate approval for his current package of higher education reforms, with Labor, the Greens and the Palmer United party all signalling their opposition.
A Guardian Australia survey of 17 university vice-chancellors last week showed many had concerns about the changes, including the prospect of loading students with greater debts.A Guardian Australia survey of 17 university vice-chancellors last week showed many had concerns about the changes, including the prospect of loading students with greater debts.