The HELP system has assisted millions of Australians with their university degrees, but the income-contingent loan needs an overhaul.
When I enrolled in an arts degree many years ago, the last thing on my mind was how much the degree would cost me.
Today, I’m still paying off my HELP debt, thanks to further study. And luckily it is now quite small. Independent MP Monique Ryan said last week that an average Australian who was earning $60,000 and had recently finished a degree, with an average-sized HELP debt, would have ended up with a larger debt last year, despite making repayments.
Now, there is technically no interest on a HELP. But annually on June 1, it is indexed by the rate of inflation (it’s calculated using the Australian Bureau of Statistics’ consumer price index, but is slightly different to the annual inflation rate – you canThat indexation is applied to whatever part of the loan has been unpaid for more than 11 months.Firstly, inflation has been high, which meant that for 2023, the indexation rate was 7.1 per cent.
“We are burdening a generation which is already dealing with a cost of living prices and a housing crisis,” she said last week.Ryan and her fellow teal independents say this should change, and she has a petition supporting her push – at the time of writing, about 190,000 people had signed it and counting.
It also recommended changing the indexation rate to whichever was lower between inflation or the wage price index, and reducing repayment times by changing when indexation is applied so that the money withheld from graduates’ incomes is counted before their debt is indexed, not afterwards.
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