Student Financial Supplement Scheme will close

Minister for Children and Youth Affairs, Larry Anthony, today announced that the Australian Government would close the ineffective Student Financial Supplement Scheme from the start of next year.

“The Government is acting in the best interests of Australian students and taxpayers by administratively closing the Scheme from 1 January 2004. The Government announced in April this year that this Scheme was being closed at the end of the year.

“The Scheme was introduced in 1993 in a climate of high youth unemployment, high interest rates and when there were few other choices available to students to help fund their studies.

“However, the loan has become a debt trap for students, especially indigenous students. Loans that have been taken up by some of the poorest students can result in effective interest rates of up to 16 per cent.

“Even the National Union of Students welcomed the announcement that Scheme would be abolished and said in a statement:

This is a great victory for students unions…NUS opposed the Student Financial Assistance Scheme because it places students in a debt trap.”

Daniel Kyriacou, President National Union Of Students, 24 April, 2003

“The Scheme has also become an unnecessary burden on taxpayers and has created bad outcomes for students. The Australian Government Actuary estimates that more than $1 billion worth of loans may never be recovered.

“It would be simply irresponsible of the Government to allow this situation to continue.

“The Australian Government Solicitor provided advice that closing the Scheme administratively is lawful and so the Government will act in the best interests of Australian students and taxpayers,” Mr Anthony said.