The federal Labor government introduced their student debt relief bill earlier this month, which will cap the rate of indexation applied to existing HECS debts.
The bill means the rate of indexation for HECS debts will be based on either the Consumer Price Index (CPI) or the Wage Price Index (WPI), whichever is lower that year.
These changes will be backdated to last year’s indexation, switching from the CPI of 7.1 per cent to the lower WPI of 3.2 per cent.
The relief bill will be felt by about 3 million Australians and will save students nationwide an estimated $3 billion.
But, it will also leave over $70 billion of student debt untouched.
Independent MP Monique Ryan, the federal member for Kooyong in Melbourne’s East, launched a petition earlier this year calling for Minister for Education Jason Clare to “change the way HECS debts are indexed”.
The petition garnered widespread support and over 288,000 signatories.
In an exclusive interview with The Swanston Gazette, Dr Ryan shared her HECS debt reform plans that aim to make higher education more accessible for Australian students.
The petition's success was “unprecedented” and showed that “students do have the power to put pressure on” the government, she said.
Dr Ryan said that while cancelling HECS debt entirely would be “unrealistic”, she plans to take further steps to make university more financially attainable.
“It’s a question of finding pragmatic principled things we can do in the short and medium term to try and decrease the burden of HECS debt for people,” she said.
Instead of basing indexation on whichever is lower, CPI or WPI, she said that a fixed increase, such as 3 per cent annually, would give people certainty and the ability to plan for payments.
“It would give more certainty to financial institutions that are looking to lend people money for homes and things like that. It just gives people a bit more security, in terms of their financial position,” Dr Ryan said.
Under the government’s new reforms, students will also receive indexation credits to their accounts once the legislation has passed. Anyone who has paid their HECS debt in full will receive their indexation credit as a cash refund.
A spokesperson for the Department of Education told The Swanston Gazette the changes would be introduced “as soon as practicable”.
The Department said the 2024-25 budget prioritised recommendations made in the Australian Universities Accord Final Report and will ensure that indexation does not rise faster than wages in the future.
Dr Ryan also wants change concerning the timing of indexation, rather than have it applied after any student contributions for the year have been deducted.
Currently, HECS indexation is applied on June 1 every year, before student payments are credited to their accounts in July.
This is a system that is “just completely wrong”, she said.
Dr Ryan’s final proposed change to ease the burden of university on students is a call for “an immediate dismantling” of the job-ready graduate scheme.
The job-ready graduate scheme “effectively doubled” the cost of many degrees, such as those in Arts, Commerce, and Communication, leaving some students paying over $2,000 per course.
Dr Ryan said she plans to have a meeting with representatives of the Minister for Education in the coming fortnight to discuss her suggestions for reform.
In the meantime, she urges as many people as possible to contact their local MPs and voice their support of the legislation.
“The squeaky wheel gets the oil if you keep this on the agenda,” Dr Ryan said.
“If Parliament and politicians are aware that people are really thinking about this and still want more, they’ll advocate more strongly.”
“I do think that we can continue to get progress on this. It’s not all going to happen overnight, but we have to keep the pressure up, it’s how we get results.”
Anyone wanting to learn more about the upcoming changes to HECS indexation and how they will affect them can read about it on the Department of Education or ATO websites.
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