There have been plenty of fireworks this week over the Australian federal government's proposed changes to higher education funding. According to calculations by the National Centre for Student Equity in Higher Education, published yesterday on The Conversation news site, a graduate on an average income of $80,000 would take 16 years to pay back a $75,000 HECS-HELP debt and 22 years for a $100,000 HECS-HELP debt.While not a "lifetime debt" it's certainly a big chunk of any graduate's working life. Under the plan floated by Treasurer Joe Hockey & Co, students' debts would keep mounting, even while they took a break from the workforce, perhaps to start a family. Under the current system, the debt would be frozen during such a break.Equally quickly, speculation sprang up that this could lead to a new type of loan product. However, no bank is likely to touch what would essentially be an unsecured debt the size, at least, of a car loan and perhaps as large as that needed to buy a small city apartment - and was, in addition, only charged at the long term bond rate. That rate is about 4 per cent pa now. In contrast, borrowers pay around 6 per cent for an average home loan - which is, by definition, secured by residential property.Well, no bank is likely to touch it just yet anyway. But that may change.There are no guarantees that, once debt is tied into an interest rate rather than tracking CPI, students of the future won't be charged according to the most favourable yield curve by a future cash-strapped government. The student loan story could get very heated indeed - and may need to as there are already plenty of HECS refugees living overseas.So, if the government is going to get fair dinkum about collecting its HECS-HELP debt, it could look to how the tax office prevents people with unpaid tax debts from leaving the country if it believes they won't be coming back. It's one way to stop the brain drain - and once our talented scientists, researchers and entrepreneurs head overseas, that's where they tend to stay.In a further blow to the concept of the clever country, it's likely that a deregulated tertiary education sector will boost fees. An already big pie of student loans will get ever larger - so how will the government deal with the inevitable delinquencies? Should it even put itself into the financial services business?If the loans were legally binding, of course, they could be bundled together as collateral and securitised - but don't tell anyone.Paul Bloxham, chief economist for Australia and New Zealand at HSBC Bank, has been on the record in the past about the value of the education sector is to the Australian economy. He spoke to Banking Day about the likely effects of lessening the regulation of student fees, and the likely effects from the policy changes proposed by the government to deregulate university fees. Bloxham said, if the private cost of education rose,