Could not agree more with you both, very well presented.
The fair and equitable action the Government should take is to retrospectively backdate the 20% reduction to include all voluntary repayments made since June 1, 2023 to HECS-HELP debts, even if debts have now been paid off in full. This would demonstrate a genuine commitment to fairness and support those who have taken proactive steps to manage their student debt.
This retrospective application would not only acknowledge the financial commitment of these students but also incentivise others to make voluntary repayments going forward, knowing that such actions will result in a tangible benefit and those proactively taking steps to manage their financial obligations will not be disadvantaged but benefit equitably from any future support.
Backdating the 20% reduction to include voluntary repayments made from 1 June 2023 will also align with the date the fairer indexation HELP changes were introduced in determining and applying the lower indexation rate of either the WPI or CPI.
I wrote to my local electorate MP and also the Minister of Education earlier this year with a request to consider changes to including all voluntary repayments made since 1 June 2023 in the 20% reduction as this would provide much-needed support and demonstrate the government’s commitment to easing the financial burdens of those who are working hard to pay down their student loans, with both Ministers responding as below.
The Government acknowledges the significant financial commitment individuals made to reduce the balance of their HELP debt and understands the merit of backdating the 20% reduction and sympathises with those who paid down their HECS-HELP in response to the indexation of the last two years BUT at present the view of the Government is that the policy should be aimed at providing relief to those who were not able to make voluntary payments on their student debts.
Firstly, I acknowledge that some students/graduates are not in a position to make any voluntary repayments and what the Government is saying here, no problem at all, I understand.
I also acknowledge that there are students/graduates out there who can pay down their HELP debt but choose not to, after all, prior to the CPI indexation carnage of 2 years ago, it was always well advertised that holding a HELP debt was one of the best debts you can have, it seems this group who chose not to make voluntary repayments were the smart ones. Nothing wrong with this, no resentment with this group, also no problem at all, well played, however, the Government should not penalise the group that chose to make significant efforts to pay down their loans based on the facts at the time and are now financially worse off.
There is a distinct difference between NOT ABLE to and CHOOSE not to.
The problem I have is for the people doing what they think is right – this group has been punished financially.
Many students made the conscious and difficult decision to voluntarily make repayments to pay down their HELP debt to avoid high CPI indexation rates being applied to their HELP debt and mitigate the highest rate of interest on competing loans or continue saving for a home loan. It does not mean they could really afford to; it was a financial decision based on facts available at the time, good economics, perhaps involving many sacrifices. This group of students should not be disadvantaged for doing the right thing and trying to get ahead in life.
Ensuring the debt reduction initiative is as fair and inclusive as possible for all students/graduates by including all voluntary repayments made since 1 June 2023 in the 20% reduction would provide much-needed support and demonstrate the government’s commitment to easing the financial burden of students and graduates who are working hard to pay down their student loans and providing them with immediate relief.
It would also send a message that the government values initiative-taking efforts by students to reduce their debt and recognises the challenges students have faced in an era of rising living costs and economic uncertainty, importantly making it a level playing field for all students/graduates.
I can only suggest everyone that been adversely affected by this recently implemented law contact the Minister of Education and/or their local electorate MP seeking a law adjustment or a new law implemented to retrospectively backdate the 20% reduction to HECS-HELP debts to include all voluntary repayments made since June 1, 2023.
Let’s make it fair for all, it’s the right thing to do.
Do nothing, nothing will happen!
Note: The ATO are not the Law makers here, the ATO is only responsible in administering the Law. Lets have the Law changed - reach out to your MP and the Education Minister.
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