Graduates to pocket thousands with uni debt law to pass
Dominic Giannini |
Laws to cut debts for university students and graduates are expected to be waved through parliament, saving people hundreds of dollars a year in repayments.
Federal Education Minister Jason Clare said legislation to slash HECS debts by 20 per cent and increase income thresholds before minimum repayments kick in will make the system fairer.
“It means you start paying off your uni degree when uni starts to pay off for you,” he said while introducing the bill to the House of Representatives on Wednesday.
It is the first bill the Albanese government put before parliament at the start of its second term.
People earning between $60,000 and $180,000 will save hundreds of dollars each year under the changes.
Someone on $70,000 will save the most – $1300 a year – on minimum repayments due to an increase to the thresholds at which the debts must be paid back.
“That’s real cost-of-living help,” Mr Clare said.
“More money in your pocket, not the government’s, when you really need it.”
The bill is set to sail through both houses of parliament after the opposition flagged it would support the measure.
The coalition originally opposed the bill, calling it “elitist”, but changed its tune after a thumping election loss in May.
“We will be constructive where we can,” Opposition Leader Sussan Ley told Sky News.
“That doesn’t mean a blank cheque of goodwill for everything that comes across the table from the Labor Party.”
Bruce Chapman, the architect of the HECS scheme, said the relief would make the system fairer by giving those on lower salaries more money in their pockets.
But the top priority should be reviewing the price of each degree because humanities students finish with the highest level of debt and end up being the lowest-paid graduates.
“All the prices are wrong,” Professor Chapman told AAP.
Mr Clare said further reforms were being looked at after the failure of the former Liberal government’s job-ready program.
The program aimed to fill skills shortages by making it cheaper to take courses like teaching, nursing and psychology, while doubling the cost of popular degrees including law, communications, business, humanities and the arts.
“If the intention there was to reduce the number of people doing arts degrees, it hasn’t worked,” Mr Clare said.
“People study the courses they’re interested in, that they want to do, that they love.”
The universities’ accord final report branded the program “deeply unfair” because it punished students who followed their interests.
It recommended that fees reflect future earning potential as part of 47 recommendations to reform the sector.
Other aspects about how HECS debts were paid off also needed to be addressed, Prof Chapman said.
HECS repayments are taken from a person’s pay slip if they’re earning above an income threshold.
But the money isn’t immediately taken off the total debt and is instead deducted as a lump sum at the end of the financial year after indexation has been applied.
The university accord recommended the arrangement be changed to make the system fairer.
The Australian Tertiary Education Commission has been established in an interim capacity to implement long-term university reform and will review the HECS system over the next 12 months.
Mr Clare will introduce further legislation in the coming months to set the commission up as a permanent body.
AAP
