Rising chorus to halt student loan indexation as inflation sends debts soaring
Help keep family & friends informed by sharing this articleBrisbane wealth adviser Alanna Fraser has been battling to pay off a university student debt of $102,000.The National Union of Students says the federal government is profiting from student loansTreasurer Jim Chalmers says the system is fair
Ms Fraser has joined a growing chorus of graduates, supported by The Greens, in calling for an overhaul of the system as student loans balloon as a result of high inflation. It's allowing the federal government to pocket a windfall from the high indexation, based on CPI over a two-year period.Ms Fraser said when she logged onto her myGov account to look at her HECS-HELP debt she found it "terrifying, heartbreaking and depressing"."The sensible choice would be to freeze indexation until inflation gets under control, but the selfish person in me says abolish it.
"I found out the hard way. I was so excited to pay off my debt, but the ATO did not appear to update the debt payments," she said."I think it's profiteering — people need to know about it and it has to stop now."Lotta Halsted, 25, is about to have her first baby with a $34,900 HECS-HELP debt hanging over her head.The nursing graduate has whittled it down from $42,000, but now fears it will soar while she is on maternity leave.
She was also backing some a "pausing, or alternatively a link to the cash rate" rather than using inflation as the measure. "It accesses the cash at the Reserve Bank cash rate, a 10-year bond yield, which currently sits at 3.6 per cent," he said. Several student bodies recently presented papers or addressed the Senate and Education and Employment Committee which is inquiring into the Greens Bill to abolish indexation and raise the minimum repayment income to the median wage which sits at $62,400.Greens senator Mehreen Faruqi says the student debt system is causing enormous stress.
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