Comments on Timothy Higgins et al "Higher education policies could result in big increase to federal debt: experts respond", 6/04/2016
The headlines in the presses and news reports are all about the 500% increase in the so called costs to the government, such as this statement in this post: "the annual cost of HELP loans to the government will rise more than six-fold over the next decade, to $11.1 billion in 2025-26", but few have talked about the side of the savings associated with those deregulation policies and the increase in the interest rates for indexation of the students' debts.
For example, the effects of increase in the interest rates for indexation would be to increase the government's return with the same amount of student debts and that is compounded year after year. Why people don't point that out that would be good for the government if one look at purely from the point of nominal returns in the investment in higher education. Just imagine if the government could charge an infinite interest rate and how much return that would be!
Secondly, with the deregulation to allow universities to charge higher fees, the government's current level of subsidy to higher education will be decreased, right? And that will be a huge saving for the government.
Thirdly, the effects on students and their life in the future will need to be considered. All talks are about the effects (and that is focused on only a small part of that unfortunately, as I mentioned above), and few have included on how that will impact on students and also its equity effects on different people including the likely flow on effects on whether the same level of participation in higher education could be maintained and whether some particular groups particularly disadvantaged one will be impacted disproportionately.