KEY POINTS
- There must be changes to the way student loans are increased, Teal MPs say.
- It comes as the government mulls changes following a report into Australia’s higher education system.
- The government is considering recommendations to make the system fairer, the education minister says.
Federal Teal MPs want changes to the way higher education loans are hiked, saying the existing system is unfair.
More than 2.9 million Australians have a HELP debt, such as , with the average debt about $26,500, according to the most recent Australian Taxation Office data.
These debts are indexed each year in line with the March quarter inflation figures. Debate on the issue was hot last year when inflation for the period came in at 7.1 per cent, which meant .
When indexation is applied is also contentious. It happens on 1 June, but loan repayments are not applied until after tax returns are processed despite the money being taken out each pay cycle.
Victorian Teal MP Monique Ryan is leading calls for change, and has launched a petition six days ago which has since garnered more than 121,000 signatures. She is backed by fellow independents Zali Steggall, Zoe Daniel, and Kylea Tink.
Ryan says the current system is “unfair” and has called on Education Minister Jason Clare to reform the HELP system “as a matter of urgency”.
She told ABC TV on Wednesday afternoon that they want Clare to “change the way by which HECS indexation is undertaken so it reflects the lower of CPI or wage increases so people aren’t going backwards while trying to pay off their debts.”
The same recommendation was made in the , released last month.
It also recommended indexation is applied only after repayments have been accounted for, and for a review of bank lending practices that would acknowledge HELP loans as different to others so that they would not limit borrowing capacity for home loans — something Ryan has also criticised.
“I think it’s entirely inappropriate that your HECS debt is taken into account when trying to get a home loan,” she told the ABC. “It’s not the same as a debt on your credit card and it should be considered differently.”
The Accord’s final report looked at wide range of issues and . The government has not confirmed which it will accept, with Clare saying at the time of its release that they were all under consideration.
Ryan said she had met with Clare, and said he was “looking at the proposal of the accord” but had not given “any cause for strong feeling that he’s going to make changes to HECS indexation”.
“The treasurer is indicating there’s a lot of pressure on the budget,” she said. “This is something that has to be in there.”
Clare has previously said there was , labelling the current method “not right”.
On Wednesday, a spokesperson for Clare said Australians would learn if the government plans to make any changes to the HECS-HELP system “in the coming months”.
“The Universities Accord makes a number of recommendations to make the HELP system simpler and fairer,” the spokesperson said.
“The government is considering these recommendations and will respond in the coming months.”
Source Agencies
