Greens Deputy Leader and Education spokesperson Senator Mehreen Faruqi will today give notice of 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, from $25.5 billion in 2012 to more than $68.7 billion in 2021.
The Education and Other Legislation Amendment (Abolishing Indexation and Raising the Minimum Repayment Income for Education and Training Loans) Bill 2022, which Senator Faruqi will introduce during the November sittings, 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 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.
Inflation has since risen to 7.3%, meaning an even higher indexation rate is expected in 2023.
As stated by Senator Mehreen Faruqi, Greens spokesperson for Education:
“Student debt is no small problem. About three million people in Australia have the burden of student debt.
“At a time when the cost of living is biting hard, governments can no longer ignore the student debt crisis and its impacts.
“Study debts are impacting people’s ability to obtain loans, their mental health, their ability to save up to buy a home or simply afford to live a good life.
“Scrapping indexation on HELP debts and raising the minimum repayment threshold will provide much needed money in people’s pockets to make ends meet or pay rent.
“No one should be shackled with a debt sentence just in order to study. Higher education should be free. This bill is one of the first pieces of the puzzle in making that vision a reality.
“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.”
