HECS/HELP was introduced back in 1989 as an interest-free loan indexed every year,which students start repaying once they reach a certain income. Repayments are automatically deducted as a percentage of your income before tax – and the proportion taken away increases the more you earn.
Eagle-eyed critics will say it’s not the first time that HECS/HELP loans will have been indexed by such a high amount. In 1990 – the first year of the program – they jumped8 per cent.
But for most of the 1990s,wages grew fast enough to keep up with inflation – and often muchfaster than that. And at no point did they fall short of inflation for aslongas they have recently. For the past two years,we’vecopped a cut in real wages. Most recently,in December,prices soared 7.8 per cent over the year,but wages climbed just 3.3 per cent. While our HELP loans are growing,our real wages – and our ability to pay off that debt – have gone backwards.
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Even before the 7.1 per cent indexation kicks in,the time it takes to repay our HELP has increased from7.3 years in 2005 to 9.5 years in 2021.
We’re also funding a much larger slice of our degrees ourselves. In 1989,the government funded78 per cent of a Commonwealth-supported place. By 2022,it paid for 51 per cent. For the hardest hit – those studying disciplines including accounting,law and economics from 2021 – the Job-ready Graduates package reduced the government contribution to just7 per cent.
That means students are paying more for many degrees. At its most extreme,a humanities degree which cost$19,800 in 2010 (adjusted for inflation) would set you back$43,500 in 2021 – more than double.