Modelling undertaken by the Parliamentary Budget Office for ACT Independent Senator David Pocock shows that changing the timing of when indexation is applied to student debt could save people with HECS-HELP loans some $704 million over 4 years, simply by slowing the growth of their debt through acknowledging compulsory payments made during the year.
The PBO’s analysis also shows higher education debt has increased by $10.26 billion to 2024-25 following the introduction of the former Coalition Government’s Job Ready Graduates package.
It also highlights that changes to the student loan repayment thresholds will increase the total amount that the person will need to repay over the course of the HECS-HELP loan.
Senator Pocock said fundamental reform was needed with current and former students paying the price for piecemeal policy and slow changes to the failed higher education policies of former governments.
“We need to tackle the root cause of burgeoning higher education debt that is growing the intergenerational divide in this country and exacerbating the cost-of-living challenge for young people,” Senator Pocock said.
“The higher education system is no longer fair and populist policies like Labor’s pledge to wipe student debt by 20%, while welcome, won’t fix the main issue which is the cost of some degrees and the new debt students are wracking up currently.
“The Universities Accord final report released over a year ago recommended ‘urgent remediation’ of the Coalition’s failed Job Ready Graduates package.
“We have to get on with fixing this, handballing that task to a new body that hasn’t even been established is not going to cut it in the face of such steeply rising student debt burdens.
“It is also deeply unfair that people are having to pay indexation on amounts of debt they have already repaid. Student debt should only grow in line with what people actually owe.
“The Albanese Government did the right thing by reforming the rate of indexation but failed to tackle this part of the problem. Both major parties should commit to doing that now.
“I am also concerned that changes to the repayment thresholds will have some unintended consequences and disadvantage people graduating into careers that require a university degree while not providing high paying jobs straight out from graduating, or a slower income trajectory, such as in pharmacy, personal services, and communications.”
Senator Pocock’s running mate, Hannah Vardy, who is also a current university student said soaring rates of student debt were impacting people well into their working lives.
“Young people today already carry an outsized burden due to the policy choices made under previous parliaments - from the climate to the housing crises alongside a spike in student debt since the Job Ready Graduates package was introduced in 2021,” Ms Vardy said.
“The next parliament must do better to address these challenges and put a stop to unsustainable levels of student debt.”
A copy of the modelling will be published at https://www.pbo.gov.au/publications-and-data/publications/costings
Senator Pocock is hosting a Youth Forum tonight at the ANU which more than 200 people have registered to attend https://www.davidpocock.com.au/youth_forum_2025