HECS debt

If you have a leaky pipe there are two things you can do.
– You can fix the pipe;  seal the leak, stop the drip, and make it work again.
– Or you can ignore the problem, maybe put a bucket underneath to catch the spills, and hope it doesn’t get worse.

Right now, Australia’s HECS system is a leaky pipe.

Unlike banks and credit unions, the Australian Government does not count your HECS repayments before applying indexation in June. That means interest is charged on a larger debt than what you actually owe, costing graduates around $2,000 more on average.

And instead of fixing the leak, the Government has gone for two, short-term patch jobs.

First, the Government proposed linking indexation to CPI or WPI — whichever is lower.
Sounds helpful, but in reality, it only saves students money in rare years when wages grow slower than inflation, which just means Australians are already falling behind.

Second, they’ve promised a one-off 20% HECS debt reduction.
Tammy is open to this idea and broadly supportive of anything that eases pressure on students.

But let’s be honest, this is a sugar hit, not a structural fix.
Neither of these changes gets to the root of the problem.

In other words: the pipe still leaks.

Tammy’s Solution: Fix the Timing of Indexation