Australian Financial Press – All rights reserved A loan to buy a home with the help of Fafsa, Australia’s biggest student loan provider, is due to be repaid.
Key points: Fafsafsa says it expects to be paid off in 2021 and is not in the position to make any further repaymentsOnce the loan is paid off, FafSA will give the money back to borrowersThe government is considering a number of options to stop the loan from spiralling out of controlMore than $300m of FAFSA’s student loan portfolio has been overpaid, with about half of those owing more than $100,000.
The Federal Government is considering whether to make a range of changes to address the problem.
The amount of the overpayment is not yet known, but Fafsanas chief executive David Smith said Fafsbassas annual report had not been completed.
“Fafsa’s balance sheet has been assessed by the Reserve Bank and the Department of Finance, and the balance sheet is in line with our expectation,” Mr Smith said.
“We are currently looking at our options and options that we are likely to have to make some adjustments to the structure of our repayment scheme to be able to make it sustainable.”
Fafsas annual accounts are due to come out on September 30.
Fafsbask said it expected the money to be returned within a month, but Mr Smith cautioned it could take longer.
“Our primary focus is to ensure that the student loan repayment scheme is sustainable over the long-term,” Mr, Smith said, adding that there were discussions on how to manage the situation.
“The longer we delay this, the greater the risk that it’s going to become unmanageable.”
In the interim, we are still in discussions with Fafssafsa on how best to make the repayment repayments.
He said the organisation was working with the Department to ensure the scheme was sustainable.””
Facing mounting debt, Fasssafas needs to reform the repayment structure so that it can make the most of its $300bn portfolio of student loans,” AFSA chief executive Scott Rutter said.
He said the organisation was working with the Department to ensure the scheme was sustainable.
“There are many issues to be considered, including the viability of the current scheme as a whole, the sustainability of the individual repayment arrangements, and how the scheme can be reformed to allow the repayments to be made on a sustainable basis,” he said.
The National Student Loans Network said it had concerns about Fafsavas repayment plan.
NLSN chief executive Tim Scott said the scheme should be reformed.
Mr Scott said it was not a good financial strategy.
A spokesperson for Fafsfas said the company was working to ensure its borrowers were getting the repayment they needed.
They added it was committed to making sure all of its customers were fully repaid.
Topics:student-loan,education,education-industry,federal-government,education—other-wealth-issues,consumer-protection,australiaFirst posted September 30, 2021 08:58:24Contact Louise SmithMore stories from New South Wales