Re-elected Albanese government would slash HECS-HELP debts by 20 per cent
Student debts would be slashed by 20 per cent under the latest part of the federal government’s election pitch to ease cost of living pressures for young Australians.
A university graduate with the average debt of $27,600 would see about $5,520 wiped from their outstanding loan next year under a re-elected Albanese government.
The waiving of fees follows Saturday’s commitment to reduce the amount graduates have to repay each year and allow them to earn more before having to pay down debt.
The whole package would cost the budget more than $500 million.
Jason Clare has already faced opposition backlash over the plan. (ABC Alice Springs: Lara Stimpson)
The government has argued the changes would not be inflationary as the debt reduction would occur over a long period.
Prime Minister Anthony Albanese said it would equate to a $16 billion cut in debt on accounts as at June 1, next year.
“This will help everyone with a student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead,” he said.
“Our whole nation benefits when we make it easier for people to access education.
“This is about opening the doors of opportunity — and widening them.
“No matter where you live or how much your parents earn — we will work to ensure the doors of opportunity are open for you.”
Mr Albanese will unveil the full details at a campaign rally in Adelaide on Sunday.
Anthony Albanese says the changes would open the door for more Australians to complete tertiary education. (ABC News: Lucas Hill)
Longer loan, larger end cost?
The government has framed the policy — which, coupled with other already announced changes would cut almost $20 billion in student debt — as a cost of living relief that would go some way to tackling intergenerational inequality.
It would also be expected to contribute to the government’s target of 80 per cent of Australians having achieved a TAFE or university qualification.
But, paying less off a loan a year would extend the life of the loan, meaning the sum would grow larger.
A senior source told ABC News that would leave some graduates with a $20,000 debt with an interest bill double that.
The opposition has criticised Saturday’s announcement, arguing it risked signing up younger Australians to a lifetime of debt.
Shadow Education Minister Sarah Henderson said it would cost someone with an average loan an extra $4,000.
“The government must come clean on how much more this will cost 3 million Australians with a student loan,” she said.
Education Minister Jason Clare on Saturday responded to questions about the proposal, including if it would increase the end price of a loan.
“That’s not necessarily the case. It’s not the advice we’ve been given,” he said.
