Latest news with #HECS
Perth Now
2 days ago
- Business
- Perth Now
‘Too lazy': Labor blasted over ‘rigged' system
Aussies keen to see their student loan debts cut by 20 per cent as promised by Labor in the federal election may not be so happy when they check their accounts. Since Sunday, students with HELP or HECS loans would have seen their debts increase by 3.2 per cent as indexation kicked in. Indexation serves to adjust student loans according to inflation – but the timing at which they are applied has been heavily criticised for years. 'HELP debts aren't actually very helpful,' independent Tasmanian senator Tammy Tyrell said. 'Today, students are watching their debts go up, with the money they've paid through the year nowhere in sight. Senator Tammy Tyrrell has called for the government to address HECS/HELP indexation. NewsWire / Martin Ollman Credit: News Corp Australia 'Banks reduce your loan before charging interest. Credit unions do too. Just not the government who pretend someone's repayments don't exist. It's costing students thousands of dollars all because Labor is too lazy to fix its accounting. 'Labor's HELP debt changes are one-off sugar hits. If they're genuine about making a difference for students, they could fix this rigged system when parliament returns. Just count someone's payments before interest is charged. 'It doesn't make sense to me that someone's debt is indexed before taking into account the thousands of dollars they've paid throughout the year,' she said. It does not take into account debt that has been paid off throughout the year, Senator Tyrrell said. NCA NewsWire /Brendan Beckett Credit: News Corp Australia 'Imagine if banks did that with your home loan – took your money, charged you interest but the repayments don't come off the outstanding balance. I reckon people would be pretty upset about that, so why do we expect students to put up with it? 'A student's HECS-HELP debt should be indexed after the yearly repayments are taken off. 'No matter what the indexation rate is, it's not a fair system when you're indexing badly. We need to change the timing, not the rate.' Education Minister Jason Clare said Labor's policy to reduce HECS debts by 20 per cent would be backdated to June 1 before indexation was applied. Education Minister Jason Clare says legislation will be backdated so debt is actually cut by the promised 20 per cent. NewsWire / Martin Ollman Credit: News Corp Australia 'It will be the first Bill that we introduce into the parliament when parliament sits for the first time in the last week of July,' Mr Clare told ABC radio. 'What that legislation will do is cut everyone's debt by 20 per cent and backdate that cut. And that's important because every 1st of June in every year HECS debts or student debts get indexed. 'That 20 per cent cut will come into effect before that indexation effectively happens to make sure that we honour the promise we made and we cut everyone's debt by 20 per cent. The Australian Universities Accord Final Report 2024 determined that the indexation should be applied later in the year after compulsory repayments made during the previous financial year were deducted from a student's balance.
News.com.au
2 days ago
- Business
- News.com.au
Labor under fire for HECS/HELP indexation timing
Aussies keen to see their student loan debts cut by 20 per cent as promised by Labor in the federal election may not be so happy when they check their accounts. Since Sunday, students with HELP or HECS loans would have seen their debts increase by 3.2 per cent as indexation kicked in. Indexation serves to adjust student loans according to inflation – but the timing at which they are applied has been heavily criticised for years. 'HELP debts aren't actually very helpful,' independent Tasmanian senator Tammy Tyrell said. 'Today, students are watching their debts go up, with the money they've paid through the year nowhere in sight. 'Banks reduce your loan before charging interest. Credit unions do too. Just not the government who pretend someone's repayments don't exist. It's costing students thousands of dollars all because Labor is too lazy to fix its accounting. 'Labor's HELP debt changes are one-off sugar hits. If they're genuine about making a difference for students, they could fix this rigged system when parliament returns. Just count someone's payments before interest is charged. 'It doesn't make sense to me that someone's debt is indexed before taking into account the thousands of dollars they've paid throughout the year,' she said. 'Imagine if banks did that with your home loan – took your money, charged you interest but the repayments don't come off the outstanding balance. I reckon people would be pretty upset about that, so why do we expect students to put up with it? 'A student's HECS-HELP debt should be indexed after the yearly repayments are taken off. 'No matter what the indexation rate is, it's not a fair system when you're indexing badly. We need to change the timing, not the rate.' Education Minister Jason Clare said Labor's policy to reduce HECS debts by 20 per cent would be backdated to June 1 before indexation was applied. 'It will be the first Bill that we introduce into the parliament when parliament sits for the first time in the last week of July,' Mr Clare told ABC radio. 'What that legislation will do is cut everyone's debt by 20 per cent and backdate that cut. And that's important because every 1st of June in every year HECS debts or student debts get indexed. 'That 20 per cent cut will come into effect before that indexation effectively happens to make sure that we honour the promise we made and we cut everyone's debt by 20 per cent. The Australian Universities Accord Final Report 2024 determined that the indexation should be applied later in the year after compulsory repayments made during the previous financial year were deducted from a student's balance.
West Australian
2 days ago
- Business
- West Australian
Labor under fire for HECS/HELP indexation timing
Aussies keen to see their student loan debts cut by 20 per cent as promised by Labor in the federal election may not be so happy when they check their accounts. Since Sunday, students with HELP or HECS loans would have seen their debts increase by 3.2 per cent as indexation kicked in. Indexation serves to adjust student loans according to inflation – but the timing at which they are applied has been heavily criticised for years. 'HELP debts aren't actually very helpful,' independent Tasmanian senator Tammy Tyrell said. 'Today, students are watching their debts go up, with the money they've paid through the year nowhere in sight. 'Banks reduce your loan before charging interest. Credit unions do too. Just not the government who pretend someone's repayments don't exist. It's costing students thousands of dollars all because Labor is too lazy to fix its accounting. 'Labor's HELP debt changes are one-off sugar hits. If they're genuine about making a difference for students, they could fix this rigged system when parliament returns. Just count someone's payments before interest is charged. 'It doesn't make sense to me that someone's debt is indexed before taking into account the thousands of dollars they've paid throughout the year,' she said. 'Imagine if banks did that with your home loan – took your money, charged you interest but the repayments don't come off the outstanding balance. I reckon people would be pretty upset about that, so why do we expect students to put up with it? 'A student's HECS-HELP debt should be indexed after the yearly repayments are taken off. 'No matter what the indexation rate is, it's not a fair system when you're indexing badly. We need to change the timing, not the rate.' Education Minister Jason Clare said Labor's policy to reduce HECS debts by 20 per cent would be backdated to June 1 before indexation was applied. 'It will be the first Bill that we introduce into the parliament when parliament sits for the first time in the last week of July,' Mr Clare told ABC radio. 'What that legislation will do is cut everyone's debt by 20 per cent and backdate that cut. And that's important because every 1st of June in every year HECS debts or student debts get indexed. 'That 20 per cent cut will come into effect before that indexation effectively happens to make sure that we honour the promise we made and we cut everyone's debt by 20 per cent. The Australian Universities Accord Final Report 2024 determined that the indexation should be applied later in the year after compulsory repayments made during the previous financial year were deducted from a student's balance.
ABC News
2 days ago
- Business
- ABC News
Labor promised to cut HECS so why have student loans increased?
Before the federal election, Labor made a promise to cut student loan debts like HECS and HELP debts by 20 per cent, if it was re-elected. However since June 1, students with a HECS or HELP loan would have seen their debt increase due to indexation; a yearly adjustment to a student loan according to inflation. ABC NewsRadio's Sarah Morice spoke with Dr Melinda Hilderbrandt, an expert in tertiary education policy, about why some loans have gone up despite Labor winning the election.
ABC News
4 days ago
- Business
- ABC News
The government promised to cut my HECS debt. When will I get it?
Before the federal election, Labor made a promise to cut student loan debts like HECS and HELP debts by 20 per cent if it was re-elected. Well, Labor won and the new session of parliament is due to start again in July. So what does that mean for you if you have an outstanding student loan? We answer some of your biggest questions. Nothing. If you still have an outstanding HECS or HELP loan as of June 1 this year, then the cut will automatically be applied by the Australian Tax Office, or ATO. It's important to note here that the tax office isn't going to be giving you cash if you still have a debt. Rather, the cut will be applied to how much you owe and taken off the balance. Federal Education Minister Jason Clare has called the cuts "a game changer" and said they're part of a suite of measures aimed at taking the burden off current students and graduates. "This builds on the changes we made last year to make indexation fairer, and all up this means we are wiping close to $20 billion in student debt," Mr Clare said. Prime Minister Anthony Albanese says it's the first piece of legislation the new government will introduce when it returns on July 22. But the new laws to cut debt will only come into effect AFTER the laws are passed (whenever that is). The cut will be backdated to June 1, before indexation (which adjusts your loan according to inflation) is applied. This year, debts will rise by 3.2 per cent due to indexation. So even though the laws won't come in till after June 1, they'll be applied to the value of your loan before that 3.2 per cent increase hits. Lucy, 28, from Brisbane, has just shy of $9,000 left to pay off on her dual Nursing/Paramedic Science degree. She messaged triple j's Hack to ask if it would make sense to pay it off before being slugged with indexation. "I've been [sacrificing] to pay it off early," Lucy told Hack. The 20 per cent cut only applies to loans as of June 1. So if you paid it off earlier, you're out of luck. You won't be getting any money back. If you paid it off after June 1 but before the end of the financial year, then you WILL get the equivalent of the 20 per cent cut back in your tax return (as long as you don't owe the tax office anything). If Lucy decides to wait to pay off her HECS debt, she'll expect around $1,780 off her total, taking her from an outstanding debt from $8,900 down to $7,120. The average HECS debt is around $27,600, according to the federal government. The average cut will be about $5,500. But it'll cost the budget a whopping $16 billion. At the last election, the Coalition said it wouldn't support the student loan cuts, though new Opposition Leader Sussan Ley has since said all policies are now under review. "This isn't real reform, this doesn't change the student fees that someone who starts university next year pays," former education minister Simon Birmingham said. Labor will need the support of the Coalition or the Greens to get the cuts through the Senate.
