The Grattan Institute has released a report recommending that all students be charged a universal 15 per cent loan fee when borrowing from the Higher Education Loan Program (HELP).

According to the Grattan Institute, currently “full-fee vocational education and undergraduate students pay loan fees of 20 and 25 per cent respectively while postgraduate and government-supported students do not.”

They believe this is both discriminatory for students and unsustainable for the government.

The report, titled Shared interest, a universal loan fee for HELP recommends utilising loan fees to recoup interest costs currently paid by the government on approximately $52 billion debt calculated as of mid-2016. These repayments will contribute to much needed budget repair.

The loan fee suggested would not be an upfront payment. Instead, it will be added to a student’s total loan amount and repayment would remain dependent on income so that individuals who earn over the minimum repayment threshold can pay back an increasing portion of their income as it increases.

The Grattan Institute estimates that this would enable the government to generate an estimated extra $700 million a year whilst continuing to transfer risk and smoothen the transition to higher education for students.

In response to the report, Minister Simon Birmingham maintained that future reform “will ensure HELP student loans will continue to be one of the cheapest loans people will ever get.”

Other commentators, including Paul Kniest of the National Tertiary Education Union, and the University of Melbourne Student Union (UMSU), have criticised the proposal for suggesting to increase costs to students without any improvements in the quality of education.

Vicki Thomson, head of the Group of Eight states “these kinds of proposals just tinker at the edges of what is a more serious systemic funding challenge for our sector.”

According to UMSU President Yan Zhuang, the proposal does not have the interest of students at its core.

“This proposal will see students take on more debt and receive a poorer education – this is not good policy.”

Another idea proposed in the report includes lowering the income amount for when graduates start repaying their debts from $54,126 per year to $42,000 per year.

The Turnbull Government has benched all higher education reforms until 1 January 2018.