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A Pound of Flesh Plus Interest

Max Hall on a story of debt collection.

Max Hall on a story of debt collection.

In May 2014, family issues left Jack* without a home and with no financial support. He applied for Centrelink and was told that proving “independence”—the necessary criterion for receiving AusStudy when you are younger than 22—requires a parent or guardian to confirm that you are no longer their dependant. Jack’s parents were unwilling to cooperate, forcing him to go through the lengthy and stressful process of finding third-party proof in an already emotional situation.

To stay afloat while proving his independence, Jack applied for a bursary, only to find that poor results in previous semesters left him ineligible (a psychologist would later attribute these results to Jack’s poor mental health at the time). As a last resort, Jack took out a $1000 student loan from the University, to be repaid in $100 monthly instalments from August.

Amid ongoing mental health issues, Jack assumed that his third appeal to Centrelink, now with the testimony of a psychologist, would finally see his independence recognised. He took out a second loan from the University to begin repaying the first. However, the decision dragged on, leaving Jack unable to pay his October instalment.

University policy calls for the application of “sanctions” against students who have overdue debts. As a result, Jack was prevented from accessing his academic record. Without this access, he was unable to reapply for a scholarship he had been awarded in the past which would have covered his entire debt.

Having missed four repayments, Jack received a letter from Dun and Bradstreet, an international debt collection agency. (The University had neglected to inform him that the debt was being referred to a collector.) Via letters and three phone calls, D&B demanded the payment of Jack’s entire $1900 debt by the end of January. With legal assistance, Jack was able to apply for an extension on payment to D&B pending a final appeal to Centrelink.

Last week, Centrelink finally recognised Jack’s independent status, ten months on from his initial application. The back pay for those ten months has allowed him to pay off his entire debt.

The tragic undertone of Jack’s experience is that it needn’t have happened. According to the University’s Student Debtor Policy, the Registrar “may waive the application of a particular debtor sanction or sanctions in exceptional cases, when satisfied that it is appropriate to do so”. Apparently, failed Centrelink bureaucracy, mental health issues, and financial hardship that has left a student with no other option than to take on debt to survive do not amount to an “appropriate” or “exceptional” case.

The University was unable to comment in time for our print deadline.

*Names have been changed.