Student debt has surged to $47.8 billion and there are now nearly 11,000 graduates who each owe more than $100,000, new figures show.
The removal of caps on student numbers, a trend towards longer degrees and the extension of the deferred loans scheme to private-sector study have contributed to the growth in debt under the Higher Education Loan Program (HELP).
More students are taking out bigger loans, triggering a likely government crackdown in next month's budget.
Five years ago, 11 per cent of debts were worth more than $30,000. Now 19 per cent exceed that amount and 5 per cent are worth more than $50,000, according to a first-time data released by the Australian Tax Office.
At the top end, nearly 11,000 people owed the government more than $100,000 in 2015-16, or $1.3 billion. That's up from 2107 people in 2010-11.
Grattan Institute higher education program director Andrew Norton said doctors, dentists and veterinarians would be among the graduates with big debts.
But longer degrees introduced by the universities of Melbourne and Western Australia – involving a three-year bachelor and two-year masters – were also partly responsible, he said.
"Strong growth in full-fee domestic undergraduates in private universities and non-university higher education providers, who pay full fees and have a 25 per cent loan fee added, will also be adding to the total of people who owe more than $50,000," he said.
Overall, tuition debt rose to $47.8 billion, up 20 per cent on the year before and more than double the $22.6 billion owed in 2010-11.
In an effort to rein in the growing amount owed under the HELP scheme, next month's federal budget is expected to lower the income threshold at which people with student loans will be required to make repayments.
Repayments will kick in at a threshold income of $54,869 per annum in the 2016-17 year but this is likely to fall to under $50,000 in an effort to reduce the cost to the budget.
The tax statistics show there are 127,000 HELP debtors with incomes in the $50,000 to $60,000 range and nearly 200,000 debtors with incomes between $40,000 and $50,000.
A reduction of the repayment threshold by a few thousand dollars will dramatically increase the number of people making repayments.
In 2015-16, 2.47 million people had HELP debts, up 11 per cent on the previous year and up 58 per cent in the last five years.
Quota phase-out
The rapidly increasing value of the debt, and the number of debtors, is due to the phasing out of quotas on the number of government-subsidised university students, which began in 2010, as well as the disastrous VET FEE-HELP loan scheme which offered HELP loans to vocational students studying diplomas.
VET FEE-HELP was closed down last year after it was rorted by some private colleges who enrolled thousands of non-genuine students. The demise of VET FEE-HELP means the rate of growth of the HELP scheme will slow this year.
HELP scheme debtors pay a zero real interest rate on their loan and, when their income is high enough to make repayments, they pay a percentage of their income via the income tax system.
The HELP scheme also includes loans for full fee university courses, for overseas study, and for payment of student services fees.
