Austudy changes increase student debts

By Jim Allen

Students receiving the Austudy allowance lost a week's payment at the beginning of this year. Austudy last year was paid one week in advance and one week in arrears. In a cost cutting exercise, the allowance is now being paid two weeks in arrears which means that students who have to meet bills on a weekly or fortnightly basis were put in a difficult financial position.

Austudy is already hopelessly inadequate, being almost $70 a week below the poverty line and available, as a grant, to fewer than 40% of students. The maximum rate for most students went up by $1.40 per week this year.

As part of the “improvements” were introduced in last year's budget, students now face the option of taking out the Austudy supplement. Students can forgo part of their grant in order to get a loan of twice as much as they forgo.

Mark Jones, chair of the Victorian Student Financial Advisers Network, is “strongly advising students to seek student financial advice before accepting” loans of this kind, because they may leave students “significantly worse off in the long run”.

The government is, however, allowing some students who currently receive nothing to borrow money through the loans scheme instead of paying an adequate living allowance to all who need it.

A student doing an average three-year degree, deferring HECS and accepting the loans scheme, could finish university with a debt around $20,000.

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