Government Considering Spooky New Plan To Collect Student Debts From The Dead

Night of the living debts.

The Federal Government is mulling over a new plan to claim student debts from beyond the grave.

According to the SMH, Prime Minister Malcolm Turnbull is considering a proposal for the May budget that would end HECS write-offs from deceased estates worth more than $100,000.

Meaning, should you expire before your tertiary fees are all paid up – and your personal estate is worth more than $100,000 – your family would likely have to take on your debt.

Higher education analyst Andrew Norton told the SMH that the move could save up to $800 million a year. However, though Mr. Norton believes the change would not bother recent, low-income graduates, he says one specific demographic will probably be affected: wealthy households where one parent has returned to work part-time after having children. As they are likely to earn less than the $54,000 repayment threshold, they’ll end up carrying their student loans to the great beyond.

The so-called “death tax” (which is a real bummer of a phrase) was raised two years ago under former education minister Christopher Pyne, though then-Prime Minister Tony Abbott put the kibosh on it. Sources say recently-installed education minister Simon Birmingham has resuscitated the discussion. When asked if he was indeed considering claiming HECS debts from deceased estates, Minister Birmingham noted that he was welcoming “all ideas from the sector, colleagues and students as I continue to consult widely on higher education reform.”

Other options being considered reportedly include raising the caps on student fees (meaning students would pay an average of 50 per cent of their education, as opposed to the current 40 per cent) and lowering the HECS repayment threshold (allowing quicker repayments).

It should be noted most loans, including mortgages and credit card debt, must be repaid, even after we have shuffled off this mortal coil.

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Photo: iStock.