JANE AGIRTAN INDEPENDENT

Fun fact: I was 38 years young when I FINALLY paid off my student debt – 11 long years after graduation.

As a holder of Advanced Diploma in Accounting I’ve entered second year of Bachelor of Business at RMIT – this resulted in a substantial cost saving compared to those who have completed a full – or a double degree.

For those not familiar with student debt in Australia, no compulsory repayments apply to those earning below $54,435 annually – yet their student debt keeps growing annually; while I was lucky to have a decade of relatively low inflation, Gen Z  graduates are far less fortunate – forget smashed avo on toast, in 2023 student debt was ” indexed” by a whopping 7.1%!

For those earning an average wage some years after graduation , compulsory student debt repayments increase to 6-9% of their income – this is in addition to 30-37% marginal income tax.

Student debt is crippling – I say this as a mortgage holder who studied full time and worked two jobs; later working full time whilst studying further to become Chartered Accountant.

Here are the reasons Albo’s policy won’t work:

• lower upfront HECS repayments will dramatically increase the time it takes to repay a student loan, driving up indexation and total debt.
• low income earners will be consigned to a lifetime of debt.
• labor’s proposal means a person earning $70,000 with an average student loan of $27,000 will pay just $450 a year off their loan!
• indexation aside, this would take a staggering 58 years to repay.
• currently, a graduate earning $70,000 a year takes around 13 years to repay their debt at an average rate of $2,106 per year.
• student debt makes it harder to secure a bank loan and buy their first home.
• since Labor was elected, student debt skyrocketed by 16 per cent or a staggering $8.1 billion, driven by high inflation and economic mismanagement.
• on an average student loan, that’s an extra cost of more than $4,000.
• young Australians continue to pay a very high price under Labor’s cost of living crisis.

This is in contrast to annual HELP* indexation of just 1.7 per cent under the former Coalition government.

Today’s announcement also confirms Labor is in policy chaos, given there is currently a bill before the Parliament to change HECS indexation as recommended by the University Accord panel.

If this bill is passed, student debt will still rise by 11.1 per cent under the Albanese government.