Latest news with #HECS-HELP
Perth Now
4 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.
West Australian
4 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.
Daily Telegraph
23-04-2025
- Business
- Daily Telegraph
HECS debts holding millions of first home buyers back
Jill Radge, a 26-year-old teacher, has revealed how after sacrificing for six years to save for a deposit, her HECS debt nearly killed her dream of buying a home. HECS debts have become one of the biggest hurdles for young hopeful buyers getting into the property market and approximately 2.9 million Aussies have one. First home buyers in Australia have faced significant challenges in recent years, with rising rents, living costs and property prices making it harder than ever to enter the housing market. Despite a degree being a necessity to secure a job in many professional fields and HECS often placed in the 'good debt' category – many buyers don't realise when it comes to getting a loan, it significantly effects borrowing power. Research from revealed 2.9 million Aussies have a HECS-HELP debt and the average amount was around $27,640 in the 2023–2024 financial year, up from $26,494 in 2022–23. MORE: Insane price paid for 'joke' Aus blocks of land MORE: Final 43 Aussie suburbs under $400k exposed Airbnb owner speaks out over value of property The number of people with HECS debts above $40K is now almost one quarter of all debtors, according to Finder. Canstar estimates showed that, for someone on the average wage (about $103,000 a year), excluding HECS debt repayments could potentially boost their borrowing capacity by up to $64,000. For someone earning a lower income of $80,000 per year, this could potentially boost their borrowing capacity by $33,000. Canstar director of research Sally Tindall said Australians who have invested in their education should not be unfairly disadvantaged when it comes to securing a home loan. 'Excluding HELP debt repayments from banks' borrowing capacity assessments where the borrower is expected to pay off the debt in the 'near term' is a step in the right direction, and one that could help level the playing field for those trying to get a foot on the property ladder with student debt hanging over them,' she said. 'That said, first home buyers should carefully consider how much debt they're truly comfortable taking on, rather than simply relying on the bank's assessment of how much they can borrow,' Ms Tindall added. Jill Radge had saved for nearly six years, living with her parents, investing in shares and putting every spare dollar into saving for a deposit. 'I was really diligent with my money, I stopped spending money on clothes and only splurged when I needed to,' she said. When she spoke to a broker to get her pre-approval, she was told her HECS debt was hindering her borrowing power. 'It took me by surprise,' she said. 'A lot of young people are wanting to buy in Sydney and it's really difficult when they've been at uni for several years and worked really hard to get into a professional career and it's a huge hurdle to getting into property,' she said. 'It's such a big debt, I personally don't think it should be a consideration for first home buyers,' she said. Her broker advised her that for her circumstances, every $10,000 of HECS it would reduce her borrowing power by around $27,000. Ms Radge had to make the decision of whether to pay off the rest of her HECS debt with her deposit and put her dream on hold, or have a tighter budget. 'I didn't want to go past my budget, I didn't want to burn myself,' she said. She almost gave up the search to save towards a bigger deposit until she found a one-bedroom unit under her $730,000 budget on the Northern Beaches, which she said was always her dream. 'I decided to keep paying off my HECS debt, and I was able to pay it off while I have this home loan,' she said. 'Young people are working really hard and they work to buy into the Sydney market … from my experience the first homebuyer benefits have really helped me and helped me to support, I think it's really important to help first home buyers get into the market.' MORE: 'Irresponsible:' Dutton promise could hurt new buyers
News.com.au
23-04-2025
- Business
- News.com.au
HECS debts holding millions of first home buyers back
Jill Radge, a 26-year-old teacher, has revealed how after sacrificing for six years to save for a deposit, her HECS debt nearly killed her dream of buying a home. HECS debts have become one of the biggest hurdles for young hopeful buyers getting into the property market and approximately 2.9 million Aussies have one. First home buyers in Australia have faced significant challenges in recent years, with rising rents, living costs and property prices making it harder than ever to enter the housing market. Despite a degree being a necessity to secure a job in many professional fields and HECS often placed in the 'good debt' category – many buyers don't realise when it comes to getting a loan, it significantly effects borrowing power. Research from revealed 2.9 million Aussies have a HECS-HELP debt and the average amount was around $27,640 in the 2023–2024 financial year, up from $26,494 in 2022–23. The number of people with HECS debts above $40K is now almost one quarter of all debtors, according to Finder. Canstar estimates showed that, for someone on the average wage (about $103,000 a year), excluding HECS debt repayments could potentially boost their borrowing capacity by up to $64,000. For someone earning a lower income of $80,000 per year, this could potentially boost their borrowing capacity by $33,000. Canstar director of research Sally Tindall said Australians who have invested in their education should not be unfairly disadvantaged when it comes to securing a home loan. 'Excluding HELP debt repayments from banks' borrowing capacity assessments where the borrower is expected to pay off the debt in the 'near term' is a step in the right direction, and one that could help level the playing field for those trying to get a foot on the property ladder with student debt hanging over them,' she said. 'That said, first home buyers should carefully consider how much debt they're truly comfortable taking on, rather than simply relying on the bank's assessment of how much they can borrow,' Ms Tindall added. Jill Radge had saved for nearly six years, living with her parents, investing in shares and putting every spare dollar into saving for a deposit. 'I was really diligent with my money, I stopped spending money on clothes and only splurged when I needed to,' she said. When she spoke to a broker to get her pre-approval, she was told her HECS debt was hindering her borrowing power. 'It took me by surprise,' she said. 'A lot of young people are wanting to buy in Sydney and it's really difficult when they've been at uni for several years and worked really hard to get into a professional career and it's a huge hurdle to getting into property,' she said. 'It's such a big debt, I personally don't think it should be a consideration for first home buyers,' she said. Her broker advised her that for her circumstances, every $10,000 of HECS it would reduce her borrowing power by around $27,000. Ms Radge had to make the decision of whether to pay off the rest of her HECS debt with her deposit and put her dream on hold, or have a tighter budget. 'I didn't want to go past my budget, I didn't want to burn myself,' she said. She almost gave up the search to save towards a bigger deposit until she found a one-bedroom unit under her $730,000 budget on the Northern Beaches, which she said was always her dream. 'I decided to keep paying off my HECS debt, and I was able to pay it off while I have this home loan,' she said. 'Young people are working really hard and they work to buy into the Sydney market … from my experience the first homebuyer benefits have really helped me and helped me to support, I think it's really important to help first home buyers get into the market.'
