8 May 2024

By Hannah Wilcox

North Sydney MP Kylea Tink has backed the government’s decision to lower the indexation figure on HECS debt to the wage growth figure of 3.2 percent.

The announcement came in the lead up to the national budget on May 14 in order to address mounting cost-of-living and inflation pressures on young people.

An unprecedented indexation rise saw debt levels pushed 7.1 percent in 2023 – a historic high.

Some students with Higher Education Loan Programs, or HECS, owed even more this year than a year earlier even though they had paid back compulsory repayments.

If the policy passes through legislation hundreds of thousands of students will be financially better off starting on July 1.

“This will wipe out around $3 billion in student debt for more than 3 million Australians,” Education Minister Jason Clare told the Australian Financial Review.

“We are doing this, and going further. We will backdate this reform to last year.”

He added: This will wipe out what happened last year and make sure it never happens again.”

Tink believes the reduction is overdue after having spoken to local young people and their parents about their financial distress in May last year.

“That month I took those observations to the Federal Minister for Education who remarked at the time, ‘Tink has a point’. In March this year I met with the Minister again to advocate for reform but to also ask for debt forgiveness,” she said on Sunday.

“Today’s announcement will have an immediate, positive impact on the lives of millions of young people who are grappling with escalating living costs and financial insecurity.”

Tertiary education is an investment in our future, she added.

“This is an example of the change that can be delivered when a government is prepared to listen to the community. This is politics done differently,” Tink continued.

“It’s critical we not only alleviate immediate financial pressures but have a system that supports greater productivity and community prosperity.”

Tink argued the policy reform could prove to be an important step towards improving intergenerational equity.

“This is a big win for young people, particularly young women, who have larger HECS debts but consistently earn less than men,” she added.

“By removing the unnecessary burden of thousands of dollars of debt, young people can focus on moving ahead with their lives.”