On March 14, Teal MP Monique Ryan launched a petition to reform the HECS repayment system. Directed at MP Jason Clare, the Minister for Education, the “Make our HECS debt easier to pay off!” petition has garnered over 240,000 signatures as of early April. Citing cost-of-living and financial burdens facing young Australians, the petition demands reforms that would make HECS debt easier to pay off.
The petition does not make specific recommendations for the HECS repayment system, but suggests, “One option is for the government to apply the lowest indexation rate in a year, whether it’s wages or prices, so that no one’s debt rises faster than they can pay it.”
HECS-HELP loans are provided by the government to tertiary education students with Commonwealth Supported Places. The loans cover tuition costs, and are paid back over time once students begin earning over $51,550 a year.
Repayments are made with every paycheck, with employers withholding estimated HECS. An individual’s repayment rate is calculated based on their income. For example, those earning between $51,550 and $59,518 annually pay at a rate of 1%, whereas the rate is 10% for those earning over $151,201.
More contentiously, HECS debts are also indexed annually, increasing with the inflation rate at the end of the March financial quarter.
In theory, the system is designed to reduce the immediate financial burden of university, making it accessible to more Australians. However, the process of HECS indexation has done the opposite for many Australians in recent years.
With inflation reaching 7.1% at the end of March in 2023, over 1 million Australians saw their debts increase, even after making repayments. Indexation added more to their debts than they had paid off.
With young Australians “facing a housing…cost-of-living…and climate crisis”, Ryan hopes that changes to how HECS is indexed will alleviate some of these pressures. Her central demand is that debts be indexed to whichever is lower – the Consumer Price Index or the Wage Price Index.
“We should celebrate students going to university, not straddle them with a lifetime of debt”, she writes on the petition. This would ensure that “no one’s debt rises by more than they repay it.”
Though not in the petition, the teal MP has also criticised the consideration of HECS debt in the determination of home loan applications. The petition comes off the back of the Australian Universities Accord in February. The report recommended this change to the HECS system, citing similar reasons.
Minister Clare has not committed to any definite changes in response to the petition. However, acknowledging the current pressures faced by Australians, particularly students, he has stated his willingness to consider changes.
Earlier this year, the Minister also floated changes to the rate at which repayments would be made, so as to reduce the amount payable by low-income earners.
Firm policy changes have not yet been proposed, yet Clare has stated that they would be announced “in the next few months” before the Federal Budget on May 14.
We acknowledge the Ngunnawal and Ngambri people, who are the Traditional Custodians of the land on which Woroni, Woroni Radio and Woroni TV are created, edited, published, printed and distributed. We pay our respects to Elders past and present. We acknowledge that the name Woroni was taken from the Wadi Wadi Nation without permission, and we are striving to do better for future reconciliation.