HELP debt indexation changes
Queensland Teachers' Journal, Vol 129 No 4, 7 June 2024, page 4.
The federal government has announced reforms to HECS and HELP debt indexation, reducing the repayment burden faced by thousands of educators.
Pre-service teachers across Australia accumulate significant Higher Education Loan Program (HELP) debt during their period of study to become teachers. Earlier iterations of higher education contributions schemes (HECS) and university loan schemes commenced in the 1990s, with the debt that graduates across all disciplines accumulated increasing dramatically over the last three decades. These increases have been exacerbated because HELP debt is indexed annually, using the Consumer Price Index (CPI) to adjust the amount owed in line with cost-of-living increases. In 2023, when CPI was impacted upon by large increases to inflation, HELP debts rose by 7.1 per cent.
In early May, however, the federal government announced that it will now use the lower of either the CPI or the Wage Price Index (WPI) when calculating debt. This change will be backdated to 2023. As such, the 7.1 per cent increase in debt in 2023 will be adjusted to 3.2 per cent (WPI in 2023), and debtors will receive a credit to their current debt. This backdating will reduce student debt by approximately $3 billion across the country. The use of the WPI is likely to ensure that large percentage increases are unlikely to occur in the future.
The QTU has been advocating for changes to the use of CPI for the indexation of HELP debts for the past few years, arguing that HELP debts should not be indexed. We have been vocal about the appalling increases to HELP debts in 2023, and the impact that those increases had on our members.
The QTU position (and that of the Australian Education Union federally) is that that for each year a teacher works within the public education system, the federal government should apply a $5,000- $10,000 reduction to current HELP debts. In addition, we assert HELP debt “forgiveness” should be applied to all teachers who have worked in the public education system for ten years. This is an inexpensive and effective attraction and retention measure, which would assist with the teacher shortage crisis currently being experienced across the country.
Another example of QTU HELP debt advocacy occurred in 2023, when we were successful in securing changes to the number of days a teacher is required to work in very remote locations before they can access debt reduction under the Very Remote HELP Debtor Guidelines.