Original source (on modern site)
The head of a review into Australia's universities has urged the government to implement all of its 47 recommendations as quickly as possible, including relief for millions of Australians with HECS-HELP debt. Ahead of the May budget Prime Minister Anthony Albanese has hinted there may be changes to student loans but has yet to detail the specifics. The chair of the Universities Accord Panel Mary O'Kane has told 7.30 that the HECS-HELP system has become "rusty and crusty over the years". "It's full of strange little phenomena that have crept in like little gremlins and it needs a good clean out basically," Ms O'Kane said. That will likely come as no surprise to the 2.9 million people with HECS-HELP debt who will be hit by an increase of 4.7 per cent when their debts are indexed on June 1st. The universities review panel has recommended changes to the way indexation is calculated. Currently it's linked to inflation, however the panel wants indexation to be the lower percentage of the Consumer Price Index (CPI) and the Wage Price Index (WPI). The CPI measures household inflation and the WPI measures change in the price of wages and salaries in the Australian labour market. "We need to make sure it doesn't suddenly go at a very high rate," Ms O'Kane said. "If you take the minimum of the two, it should stay at a reasonable level, not necessarily low, but at a reasonable level against wage growth." Professor Mary O'Kane wants the government to make across the board changes to HECS-HELP debts.(ABC News: Shaun Kingma) Other proposed changes include changing the date of when indexation is applied, so that people can pay down debt, and reassessing the starting salary at which graduates are required to repay the debt. Currently, compulsory repayments begin at a salary of $51,550. Ms O'Kane believes the current threshold is too low but would not be drawn on a precise figure. "It needs to be modelled very, very carefully to see all the implications around the whole tax system," she said. Cait and Ben Schuster have a combined HECS-HELP debt of around $90,000.(ABC News: Crystalyn Brown) Ms O'Kane also urged the banks to do their part by changing the way they assess HECS-HELP debt in home loans. HECS-HELP debt counts towards your overall debt when you apply for a home loan, and can affect how much you can borrow, if at all. Ms O'Kane argued HECS-HELP debt is different to other forms of debt such as credit cards or car loans. "(HECS-HELP) is not like an ordinary loan and it shouldn't be counted as such when people are applying for home loans and that's the issue we wanted addressed," Ms O'Kane told 7.30. "(Banks) have to have a social licence to operate and I think many of them, after the royal commission, understand the importance of being good corporate citizens. I'm sure they'll step up to the plate." Young couple Ben and Cait Schuster have a combined HECS-HELP debt of around $90,000. A Queenslander just like Bluey's was the dream for Ben and Cait.(ABC Radio Brisbane: Lucy Stone) He studied veterinary science, while she is still studying for a combined arts-law degree. "You get told these stories at school that you'll get a better life by having a degree but what life can you achieve if you have a debt?" Ms Schuster said. Despite their high student debt, they managed to scrape into the property market on their own steam, but couldn't borrow as much as they hoped for. "We had the dream of having land, having a house," Mr Schuster told 7.30. "A Queenslander, a Bluey house, but yeah, that's unachievable." Cait Schuster said she'd like the banks to change their ways. "Give us more grace, or give anyone with a HECS debt more grace as well," she said. Both would like the government to do more to help those struggling. "Considering the cost of living and people trying to do their best, if HECS is holding them back, any changes to help them out will definitely be beneficial," Mr Schuster said. Watch 7.30, Mondays to Thursdays 7:30pm on ABC iview and ABC TV Posted 25 Apr 202425 Apr 2024Thu 25 Apr 2024 at 7:45am, updated 25 Apr 202425 Apr 2024Thu 25 Apr 2024 at 9:03amBanks asked to ease barriers to home ownership