The Federal Government on Monday announced proposed changes that would see university graduates repay HECS debt when they start earning $42,000 a year, down from around $52,000.

Student fees would also rise by 7.5 per cent (by 2021), which would mean a four-year course would cost $3600 more a year.

Business owner Mitch Hanlon said the fee increase meant it was “even more critical” that Tamworth had a university campus.

“It is already an onerous economic task to go to university and now this is another added cost,” he said.

“Yes, we all make money when we hit $42,000 but many of these kids are from low socio-economic backgrounds and if they see a mountain of debt in front of them, they’ll think what’s the point if I can stay at home and live with my parents?”

Mr Hanlon said other regional centres like Coffs Harbour were able to sustain university campuses, making it easily accessible to local students.

“With the population of Tamworth and surrounds a campus here could easily do that on its ear,” he said.

Tamworth education advocate and deputy mayor, Helen Tickle, said a shake-up of the university system was necessary and more university resources should be sent to regional areas.

“The current system isn’t working and has to be changed,” she said. 

“This further strengthens the case of decentralizing universities, with more offerings in regional areas because this would obviously assist with the cost of accomodation alone.”

However Cr Tickle said the added fees could serve as an incentive to finish a course.

“Students need to be very sure of their choices and need to make an informed decision on the courses they’re going to undertake,” she said.

“There is such a high non-completion rate at these universities and you can’t keep funding students into university who might like to do the degree and then they decide they don’t like it.”