Australia considers "death tax" to reclaim unpaid university fees

The Australian government could soon collect student loan debts from deceased estates, in a move slammed as a "death tax" by the opposition.

The controversial move is being considered by the Turnbull government, and would involve the government dipping into the estates of those who owed money on their "HECS" university debt account. According to a leading analyst, it could save the government up to 610 million U.S. dollars every year.

Currently, in Australia, the deceased must still pay off other loans, such as mortgages and credit card debts, however, the idea to expand that to university fees was originally shelved by the coalition because of a potential backlash.

But Education Minister Simon Birmingham, who was sworn in when Turnbull took over the prime ministership in September, said he was under pressure to save money in his education portfolio and was "welcoming" the proposal.

"Essentially, higher education spending has grown at twice the rate of the growth of the economy," he told Fairfax Media on Wednesday.

"I welcome all ideas from the sector, colleagues and students as I continue to consult widely on higher education reform. The costs to taxpayers of higher education over recent years have grown dramatically."

Andrew Norton, a leading education analyst, said the debt recovery was "definitely worth doing" as it would mainly involve the estates of higher income earners.

By limiting the debt recovery to deceased estates worth more than 75,000 U.S dollars, it would ensure recent, low-income graduates were not involved.

"Many people who die without repaying their HECS debs are in affluent households," he told Fairfax Media.

As the federal budget has been brought forward to May 3, the government could announce the reform as a part of its higher education budget package. Endit