On Monday night, new higher education legislation made it through the Senate which will affect the threshold at which you’ll have to start paying off your HECS debt.
From July 1 next year, those of us with HECS debt will have to start paying it off as soon as we’re earning a salary of $45,000 a year.
Currently, you don’t have to start paying the government back until you’re earning $54,000 a year.
The changes passed by a vote of 34 to 33, with Labor, the Greens, and even Nationals senator Steve Martin opposing them.
Martin was worried that the change would discourage young people from attending university, and he’s probably right; committing to thousands of dollars of debt is daunting for anyone, but particularly so for those from lower-income families who don’t have a familial safety net to fall back on.
HECS debt is repaid at 1% of your income, so if you’re earning $45,000 a year, you’d pay the government $450 a year. If you continued to earn that amount for the rest of your life, and you had a $28,000 HECS debt, you’d be done paying the government back in a little over 62 years.
It’s not unlikely that many people with HECS debt will continue to hover around that income bracket for the rest of their lives, by the way – the median tax filer’s income, according to the Grattan Institute, is $44,527, while the median wage for all workers is just over $55,000. The annual minimum wage is $36,000 per annum, which is just $9000 less than the new repayment threshold.
In June, when the bill was being debated, Pauline Hanson said the changes were totally fine because we can all just “go without a couple of coffees a week to pay back [our] obligation to the Australian taxpayer”. This coming from someone who earns $200,000 a year. Tell me more about going without, Pauline!
Pauline Hanson argues that the HECS repayment threshold for uni grads should be lowered to $45k because: "I'm sure they could go without a couple of coffees a week to pay back their obligation to the Australian taxpayer". pic.twitter.com/YEMWsHuOj3
— Alice Workman (@workmanalice) June 28, 2018
Given the rising cost of living and the increasing scarcity of full-time work, these changes feel like kicking someone when they’re down, and they betray a complete ignorance of what it’s like for graduates entering the workforce in 2018. I know I’m beating a dead horse, but considering these changes were passed by people who are earning six figures, and after attending university for free in an awful lot of cases, it feels like politicians are rubbing salt in our wounds (wallets?) over and over again.
The bill now goes back to the lower house, where it’s expected to pass.
In addition to repayment changes, by the way, the bill also puts a limit on how much you can borrow from the government to study: for regular students, it’s $104,440, and for medicine, dentistry and veterinary science students, it’s $150,000.
The good news is that if you’ve paid back enough of your debt to remain below the limit, you can keep borrowing money to study, indefinitely, until you die, at which point your debt is forgiven. How generous!
I love you too, crippling debt!