HECS fees, tied to inflation, are set to rise by 4.8 percent in June, down from last year’s 7.1 percent rise. With a debt of $26,494, the average student will be liable for an extra $1,272, extrapolating from figures published by the Australian Taxation Office.
The revelation of this year’s rate follows calls for reform of the scheme. Member for Kooyong Monique Ryan launched a petition to Minister for Education Jason Clare in mid-April calling for HECS to be reformed and declaring the system “broken”.
Ryan’s petition notes that the Australian Government collected more from HECS repayments than the Petroleum Resource Rent Tax, which taxes the extraction of fossil fuels, last financial year. The tax collected $2.3 billion in 2022-23, versus the $4.9 billion collected from HECS repayments. “We should celebrate students going to university, not straddle them with a lifetime of debt.”
The petition suggests that one option for reform “is for the government to apply the lowest indexation rate in a year, whether it’s wages or prices, so that no one’s debt rises faster than they can pay it.” This recommendation was also made in the Universities Accord final report in February. The present formula relies on but does not mirror the Consumer Price Index (CPI) rate, the main index used to measure inflation.
The Accord report also recommended changing the date of rate indexation from June 1, allowing for money deducted from workers’ pay to be accounted for when the tax office recalculates debts. The ATO gives taxpayers until the end of October to lodge their returns.
The Albanese Government has indicated that reform is in the works, with changes to the indexation rate and its timing expected in the upcoming budget due on May 14. “I think there’s a range of areas where we need to do much better with the younger generation, basically, and HECS is one of them,” the prime minister told Queensland radio.
Albanese referred to the Universities Accord, saying “the system can be made simpler and be made fairer.” He expressed his wish for more Australians to attend university.
As well as Ryan, calls for reform have come from Greens Deputy Leader and education spokesperson Senator Mehreen Faruqi and North Sydney MP Kylea Tink.
University of Sydney Arts student Jasmine told this masthead that it is “really unfair that students today are tackled with a HECS debt that they can barely even pay off because of indexation.”
“When my Gen X coworker did her teaching degree, it was almost for free. Yet I will be paying at least $40,000 for a single degree amongst the pressures of the rising cost of living. I think this is really stressful as a young person entering adulthood and the fact that the government makes more money off HECS than the fossil fuel tax is extremely unethical.”
One history student who spoke to Honi Soit said her parents are funding her education because HECS is “insanely expensive” and because the cost “racks up so fast.”
A 2023 report by Futurity Investment Group found that 68 percent of Australians who had attended university were uncomfortable with the amount of HECS debt they had, with 59 percent reporting it had impacted their ability to purchase a home.