The Albanese government has been criticised for blocking the Greens’ attempt to stop the indexation of student debt.
Greens deputy leader and education spokesperson, Senator Mehreen Faruqi, panned the government for blocking attempts to introduce a bill in the past six months.
In Australia, individuals seeking higher education at university or technical colleges known as TAFE can apply for a HECS-HELP loan to pay for their studies.
“Millions of people are worse off today, and the blame is solely with Labor, who blocked the Greens’ attempts to stop this student debt indexation from happening and who have ignored desperate pleas for relief,” Faruqi said.
“My heart breaks for the many who will suffer the long-term effects of this patently unjust student debt increase. People are already being locked out of the housing market, denied personal loans and rethinking dreams of further study because of soaring student debt, and things will only get worse because of Labor.”
Government Pushes Back On Criticisms
However, the minister for education, Jason Clare, pushed back against the Greens’ criticism explaining that young Australians should remember that HECS/HELP debt is interest-free.“That’s important. There’s some confusion here in the debate around this, around how a HECS debt works. Just so people get it right. It’s not like a loan from a bank. It’s not like a mortgage, where the bank lends you money, and they charge you interest, and they make a profit. It doesn’t work like that,” Clare said.
“The taxpayer lends you money, lends you a dollar, and they get that dollar back at its real value. It’s indexed to inflation. So, the taxpayer doesn’t make a profit at all. If there’s a change to the way this works, the indexation, then effectively, the taxpayer has to pay more.”
Clare said that if the federal government were to do what the Greens party were calling for, then it would actually cost Australians an estimated $9 billion. He reminded young Australians that the cost of university degrees and TAFE course were a small price to pay when the outcome was significantly higher.
“Going to university costs you money to get a degree, but it’s got real value, too,” Clare said.
“The average income of someone with a university degree is about $100,000. The average income of somebody whose last year of education is Year 12 is $70,000. That’s a 30-grand difference every single year. And the average HECS debt is $24,000.
“Finishing school and going to TAFE or going to university is your ticket to the show. My mum and dad never finished school, but they could go off to secretarial college, and they could go off and become an apprentice. That world doesn’t exist anymore. Almost every single job requires you to finish school and go on to TAFE or go on to university. We need to encourage more people to do that.”
Student Union Calls for Debt Freeze
The National Union of Students (NUS) said in 2022, this debt rose to $74.3 billion, according to official data they obtained from the Australian Tax Office.“We are seeing greater numbers of students and graduates struggle to pay off the debts accrued in their studies. With the predicted rise of at least seven percent in HELP debts this year, we can expect to see the number of students with high levels of student debt greatly increase at a time when wages are not keeping up with the fastest-growing inflation rates since before the 1990s recession.”
The union is calling on the federal government to freeze HECS/VET Loan indexation while inflation is elevated.
“It is outrageous that during a cost of living crisis, the Australian government would profit billions of dollars of student debt,” the union claimed.
