Recently there was announcements on the news about the budget for the next financial year, this impacts students in a couple of different ways. Overall I think students got the rough end of the stick, the Centrelink Start-up scholarship will be made into loans, tax deductions on self education will be abolished and the 10% discount for paying University fees upfront will be not available The Gillard government is eager to pay for the Gonski reforms and unfortunately for us students the Axe has come down on our benefits to fund it.
Centrelink: Student Start-up Scholarship
Unfortunately the Student Start up Scholarship will be turned into loan’s rather than obligation free payment’s. At present students eligible for payments such as Austudy or Youth Allowance receive around $1,000 at the start of every semester. This is essential for many students, its used for things like textbooks which cost $200-$400 a semester, stationary, parking permit’s on campus and other necessary expenses. It takes the edge off, so students can focus on getting educated rather than working harder to pay bills.
The new scheme of loans instead of payments will be ticking over in the new year of 2014. Fortunately for those students who are presently already in receipt of eligible payment’s will still continue to receive the Student Start-up Scholarship obligation free, for the duration of their course or eligibility.
Must say I don’t agree with this change. Essentially the Gillard government has reduced their budget through heaping more debt onto students who are already heavily indebted. The average university course takes 3-4 years and with 2 semesters a year that makes for an additional $6,000-$8,000 debt upon graduation. Considering the average student owes the Australian Taxpayer around $15,000 in HECS-HELP loans upon graduation, having an extra $6,000 to $8,000 doesn’t make things easier.
Scrapping the Self Education Tax Deductions
The Government plans to Cap self education tax deductions to $2,000. Essentially people who are studying a course that will improve the employability and capacity to earn more income in the future, may be able to claim a tax deduction for relevant expenses associated with getting educated. Unfortunately as Treasurer Wayn Swan pointed out that this has lead to some tax payers being able to rort the system by claiming tax deductions for things like first class airfares, five star accommodation and things like that.
Its understandable there is legitimate concerns with abusing the right to deduct legitimate self education expenses. I for one welcome the new cap to these deduction’s. Lets face it if you can afford five star accommodation or first class flights you shouldn’t be eligible for to claim these as self education tax deductions, its simply not reasonable. Although $2,000 may not be enough its still enough to take the edge off and make it easier for people who don’t have big money to burn in educating them selves a bit further to get a better job, while still having the cash to keeping food on the table.
Scrapping the 10% Discount for upfront payment of University fees
Currently when a Australian student eligible for HECS-HELP starts a semester they have the option to either pay their fees or deffer them as a loan to be repaid when they graduate. Students did have the option to pay these fees upfront and get a 10% discount, however this will be abolished. My opinion is that I don’t see much benefit to doing this and have opted to defer my loans anyway, 10% is not much to save since HECS-HELP loans are almost interest free.