Greens Deputy Leader and Education spokesperson Senator Mehreen Faruqi will today formally introduce a private senator’s bill that abolishes indexation on all education and training loans – effectively freezing existing student debt – and raises and ties the minimum repayment income to the median wage.
Student debt has grown rapidly over the last decade, with the value of outstanding HELP debt tripling from $25.5 billion in 2011-12 to $74.4 billion in 2021-22.
The Education and Other Legislation Amendment (Abolishing Indexation and Raising the Minimum Repayment Income for Education and Training Loans) Bill 2022 halts indexation on student debt from 1 July 2022 and ties the minimum repayment income to the median wage from 1 July 2023.
Student debt is currently indexed by the Consumer Price Index (CPI) annually on 1 June. This year, with inflation so high, debts were indexed by 3.9% – the highest rate in a decade. The average student debt was estimated to have risen by $923.
Today the latest CPI data has revealed that inflation remains persistently high at 6.9%, meaning an even higher indexation rate is expected in 2023.
As stated by Senator Mehreen Faruqi, Greens spokesperson for Education:
“More than three million people in Australia have the burden of student debt. This debt is growing every year.
“Inflation is soaring and debts will continue to balloon rapidly without urgent intervention. We can no longer ignore the student debt crisis and its impacts.
“Basic things like obtaining a bank loan can be denied, or saving up to buy a house can be made really difficult by crushing study debt.
“Abolishing indexation on student debt and raising the minimum repayment threshold will provide much needed money in people’s pockets at a time when they are struggling to make ends meet or pay rent.
“No one should be shackled with a debt sentence just in order to study. This bill is a clear and immediate step to freeze student debt and provide cost of living relief.
“Fixing the repayment thresholds means that no one with a study debt will repay a cent of that debt until they’re earning above the median wage.
“Labor has an opportunity to work with the Greens and wind back Liberal-era policies which have saddled people with more debt which takes longer and longer to pay off.
“Ultimately, all student debt should be wiped and education should be fee-free.”