500 signatures reached
To: Federal Government
Freeze Student Loan Indexation
Students and Young Australians have been facing many challenges over the last decade and will be the first generation of Australians who will face their quality of living going backwards. They are struggling with an elevated cost of living, flat wage growth and, will soon become some of the most indebted Australians in history.
This is why young Australians mobilised in their thousands to remove the former government and elect Labor. Labor can not take this support for granted or else they will face the same demographic crisis facing the Liberals.
The average HECS debt will increase by $1,677 this year and next year. Anyone earning less than $63,000 will see their debt increase while making repayments.
The Government is profiting off of the average loan ($820) by borrowing money at the 10-year bond yield 3.6% while indexing the loans at 7.1%. This will see total student debt increase by $4.5bn just in indexation in 2023.
This disproportionately affects women and low SES students who take longer to pay off their loans and are thus having them compounded over longer periods of time.
What we are asking for:
We are calling on the government in the 2023 Federal Budget to freeze HECS/VET loan indexation temporarily, while inflation is elevated.
Why is this important?
The Federal Parliament report released today shows that the Labor Government is not acting in the best interest of young Australians, choosing to exacerbate the growing generational wealth gap. The Federal Labor Government must freeze Higher Education Contribution Scheme (HECS) indexation to ease the burden of student debt and have the courage to take on the intergenerational wealth crisis in Australia.
NUS is disappointed that the committee report has palmed off the student debt crisis to the Universities Accord process, with no guarantee that HECS indexation will be addressed.
“We are already looking at becoming the most indebted generation in Australia's history and now the Federal Government is looking to profit from young Australians during a cost of living crisis,” NUS National President Bailey Riley said.
“The government keeps telling students to wait for these accords. The time to act is now, not years into the future once students are thousands of dollars further in HECS debts,” Ms Riley said.
The total value of HECS loans will increase by $4.5 billion on 1st June with the average debt projected to increase by $1,700. Indexation at an estimated 7% means that individual HECS debts will increase even if a student or graduate doesn’t earn enough to pay it down. The NUS argues that this indexation is unfair, with the government expected to profit $2.5 billion from students and graduates this year.
“Ballooning student loans are pushing young Australians deeper into poverty in the midst of an escalating cost of living crisis," NUS General Secretary Sheldon Gait said.
"We know that skyrocketing student debt is causing incredible financial stress and mental health problems for students and young graduates. We are calling on the Federal Government to end this unfair practice which punishes young people already struggling to put food on the table,” Mr Gait said.
We urge the Government to listen to the voices of students and graduates and take action to end the unfair practice of HECS indexation.