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Student HECS debt relief ‘most welcome’ says learning provider

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More than three million Australians, including thousands of students throughout the Hunter, are expected to have their HECS debt slashed in this month’s budget, to the tune of a collective $3 billion. 

This move is designed to reduce cost-of-living pressures, as well as the hesitation of young people to enter higher education. 

Every June HECS debts are subjected to percentage point changes, making sure the amount owed keeps up with inflation. 

For more than three decades indexation was calculated on the Consumer Price Index (CPI), which is now at historic highs. 

The Australian Government will cap the higher education HELP indexation rate at the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June.   

This relief will be backdated to all HELP, VET Student Loan, Australian Apprenticeship Support Loan, and other student support loan accounts that existed on 1 June last year. 

In 2023 a student’s HECS debt increased by a whopping 7.1% calculated on the CPI – the highest increase since 1990. 

For many it meant their HECS was increasing faster than could be repaid. 

Under the incoming policy it would be calculated under the lower Wage Price Index (WPI) of 3.2%, ultimately saving a student thousands of dollars. 

The decision of the Australian Government to cut student debts has been welcomed by the Independent Tertiary Education Council Australia (ITECA), the peak body representing independent skills training, higher education, and international education providers. 

“The Australian Government’s initiative will be most welcome for the millions of people with student debt struggling to deal with cost-of-living pressures,” ITECA chief executive Troy Williams said. 

“ITECA welcomes the fact that this important measure will support students that undertook their studies with independent skills training and higher education providers.” 

In welcoming the move, ITECA said more could be done to support students studying with independent Registered Training Organisations (RTOs) and higher education institutions.   

One such measure, says Mr Williams, would be to remove the 20% student loan tax (formally referred to by bureaucrats in Canberra by the more innocuous term ‘loan fee’) that many students taking out an Australian Government loan to study with independent RTOs and higher education providers face. 

“It’s abhorrent that the Australian Government whacks a 20% student loan tax on the debts of people investing in study to achieve their life and career goals,” he added.   

“It’s time for the Australian Government to end the student loan tax.”

ITECA will continue to lobby the Australian Government to end the student loan tax. 

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