Is there a problem with your hex dead at this rate US to be paying mine off in 2050 we are really screwing it up for the next Generation sorry about the kids well there's a push to overhaul the student debt system which actually hasn't been properly looked at since 2008 last month an independent review of Australia's higher education system so.
Looking at Unis and T called for the whole thing to be improved basically it said we need to be encouraging more young people to get a tertiary education they won't do that if it continues to be as unaffordable as it is so let's talk about hex sorry I had.
To let's first look at how hex actually works well it's actually called the higher education loan Program help which feels fitting I think hex might have been an old term for it anyway it ensures students can go to university without needing to pay for a course up front think about paying off your hex de like climbing stairs up a building the.
Taller the building the bigger the loan when you're at the top you're debt free now students can only start climbing up this building paying off the loan after they begin earning above a certain Threshold at the moment it's $551,500 a year so anyone who's earning above that needs to be paying off their hex St what you need to know is that the.
Amount you owe is increased at the end of every Financial year in a process called indexation This is an update to the dollar amount of your loan to reflect Rising prices inflation what that means for our journey up the building though is that indexation can turn the stairs into more of an escalator that's going down last year.
Student loans were indexed by 7.1% second biggest jump in history so someone with an average hex debt earning an average wage despite regular repayments could have actually gone backwards in the amount that they owe because of indexation many people as you can imagine were not happy about this I'm now in $50,000 worth of debt I don't.
Know how to escape this so could it change well enter the latest review so the federal government appointed the University's Accord panel a group of experts to look at the higher education sector and think of ways that it could be improved now it looked at more than just hex placement poverty teaching resourcing we covered lots of it at the.
Time but today we're going to focus on Hex we made suggestions about ways to improve the hex system including changing the timing of when your loan gets indexed so that your repayments are deducted before the total loan amount is increased it also suggested a cap on the amount your hex can be indexed to avoid significant increases during periods of.
High inflation like what happened last year another recommendation was for hex to be indexed to either wages or inflation depending on which one is lower at the time of indexation cuz we know wages don't increase at the same rate as inflation so what's happening with all these recommendations well the government is looking at these proposals.
Now someone who is pushing for the government to act faster is independent MP Dr Monique Ryan independent MP Dr Monique Ryan has launched a petition to change the way hexs are indexed it has amassed more than 100,000 signatures at the time of recording I jumped on a call with her to discuss exactly what she wants Dr man.
Ryan thank you so much for joining the daily Oz it's a pleasure to be with you young people are being effectively penalized by a system which is not really fair last year over a million Australians had put thousands and thousands of dollars onto their hex debts during the course of the Year saw that hex Deads increase despite the.
Money that they've been paying back in which case the government is effectively making a profit from students hex Deads that's wrong you are a recent Tik Tok sensation and the petition that you've launched to overhaul the indexation system has really gone viral it's amazing so we've put together a petition for the education Minister and it's.
Unbelievable the number of people who have responded to it what I'd really like to hear from the education Minister when I meet with him this week is firstly an an assurance that he's going to change the way that hex STS are indexed to make them more fair I don't expect that that necessarily will be something that we'll hear in the May.
Budget but it is something that we should hear before the next federal election so what do we do with all of this well the ball is in the court of the education Minister Jason CLA I reached out to his office and they told me the government is considering all of these recommendations and will respond in the next few months he also adds I.
Want to make the point that going to University makes you money the average annual income of an individual with a University degree is approximately $30,000 more than the average annual income of someone whose last year of Education was year 12 so we'll wait and see how Dr B Ryan goes with a petition Handover this week but until then what.
Do you think
HECS vs HELP – What a distinction phrases produce. Contribution implied the debt was once one section of an even bigger system for overlaying the fee of eduction, “If I'm making a contribution, then who else is contributing”. Loan on the quite quite a lot of hand makes it seem purely person, the premise that the wait on is all yours by myself and the fee wants to be all yours. Plus contribution sounds more flexible, whereas most would count on that a loan is a thing that you ought to repay fully. Language replace that looks to be about riding a licensed shift to reject state and neighborhood sharing in the wait on of an informed inhabitants and so give an explanation for rejecting sharing in the prices. And indexing debt to inflation is crazy. First of the total accurate number for inflation is subjective, it's a bunch of folks searching on the worth of various goods and deciding what is consultant of our prices, the valid “accurate” inflation numbers receive debated over years, nevertheless I'll bet no person is indexing HECS/HELP down or repaying the indexed lengthen if anyone makes the case that inflation numbers had been decrease than first thought. Regarded as one of the arguments for no longer increasing wages in responses to increasing fee of residing is that fee of residing can return down, (to illustrate if the authorities enforces passing on the reduced wholesale energy prices of 2023). Plus increasing things indulge in the amount owned essentially based completely on inflation is itself a driver of inflation, a circular feedback loop of the kind that causes relatively than resolves the boom. Who will get to make a resolution the indexing amount and on what requirements the truth is? Inflation is no longer some sure and simple power of nature to which we can only react. It looks we've also adopted the mannequin from the United States that financial difficulty doesn't impact the HECS/HELP “loan”, you're saddled with it eternally no matter the cases of your life. Unlike a typical loan where the loan giver has to provide a factual judgement, on story of they part some chance, with HECS/HELP the total chance is dumped on the person attempting to receive educated, (which the authorities can appreciate on story of they produce the felony suggestions). Too execrable for these who're educated for an replace that expertise makes stale, where possibilities are you’ll presumably presumably be no longer making the many of the eduction, you quiet occupy the debt. Or even it's an replace that the authorities lets offshoring homicide on this nation. Or even you're unable to make exercise of that education attributable to illness or damage, you've quiet got the debt. Have to retrain, then compose up some distance more debt. And if we're bit by bit adopting the mannequin compose the United States, how long till the Australian authorities lets non-public lenders provide these loans?Even the reveal that education increases earnings is no longer as sure decrease as some folks imagine. Education also takes years whereas you happen to might presumably presumably be earning, and we occupy a tax system that taxes excessive earnings earners more. In operate we're saying that anyone with a HECS/HELP burden has to pay more than anyone who reaches the connected earnings degree with out view that has HECS/HELP linked to it, so that you lose the earnings of the years of view and now must pay more to the state thru what is successfully a subsidiary tax. Not to mention for quite a lot of valuable jobs (teachers, nurses, and a lot more), the state is the well-known employer and the worker has no accurate vitality to receive a smarter earnings in holding with that education, the state tells them what they’ll assemble, and takes an extra decrease of tax out of it in the compose or HECS/HELP, just correct for factual measure. Moderate wage for teachers and nurses and plumbers in Australia is customarily the connected, nevertheless why does a teacher or a nurse must pay more attributable to the added HECS/HELP debt than a plumber?The more I believe and be taught about HECS/HELP the more ineffective and morally bankrupt your complete design looks.