Underemployed Graduates Will Now Have to Repay HECS Sooner

Education Minister Simon Birmingham has revealed further details about the "modest" changes to university funding to be included within next week's 2017 Budget. He's confirmed that student fees will rise by eight percent, and university graduates will now be forced to pay back their HECS debts as soon as they start earning $42,000 a year. The current threshold is $54,869, so that's quite a jump.

Let's put an annual income of $42,000 into perspective: The average full time Australian salary is $78,832 a year. For men, it's $83,902. So these changes won't affect ordinary workers who are already repaying their HECS, but they will affect those on low incomes, and those who are underemployed and don't work full time. And given underemployment is at its highest level in 40 years, with 18 percent of Australians between the ages of 15 and 24 working less than they want to be, that's an issue. And let's not forget the historically unprecedented housing bubble is pushing rental prices through the roof as well.

Tertiary education expert and Australian National University professor Dr Sharon Bell says she's concerned about the impact of the proposed HECS changes. "The government's proposed lowering of the HECS repayment threshold to just $7,000 above the minimum wage impacts on individual decision-making and also shifts policy settings," she tells VICE.

She herself did not have to repay a HECS debt, as the scheme was only introduced in 1989. But she says "all of us who have children with a HECS debt know how difficult this debt is to manage, generally at a critical time of family formation and attendant additional costs in terms of stage of life. For mature age students, who are an increasingly significant cohort under the Demand Driven System, the requirement for earlier repayment is likely to mean an investment in further education ceases to be a feasible option, as these students are already likely to be carrying other personal debts, including mortgage repayments."

The proposed changes surprise Bell because "Australian students already make a very significant contribution to their post-secondary education by OECD standards." Increasing the contribution, she says, "reinforces the flawed notion that the private benefits of education are paramount. When HECS was introduced it was specifically set at a modest level that recognised the significant public benefit of tertiary education and the contribution of our universities to the economy and our communities." While university chancellors have expressed tepid support for the proposed changes, the National Union of Students (NUS) has vowed to take action against them. "These are massive attacks," NUS education officer Anneke Demanuele tells VICE. "The lowering of the threshold means that young people who are struggling to find work in their chosen field will have to begin to pay back their debt when they're not earning even close to the average wage in Australia…plus student fees will rise to the highest level they have been in Australia's history."

The NUS is organising a coordinated day of action on the May 17 across capital cities, and hopes that through pushing back against Birmingham's proposals they can prevent the legislation passing through parliament.

"When Abbott tried to push through fee deregulation, students came out in their thousands in what were the largest student protests in 10 years," Demanuele says. "Student pressure forced the government into political retreat, and Abbott's approval ratings never went back up. We have defeated this government, a government that only stands for the rich, before and we can defeat them again."

For now at least though, the Federal Government is standing its ground. On last night's episode of Q&A, Deputy Prime Minister emphasised that all loans simply had to be paid back, regardless of someone's income.

"Currently we have $52 billion that is owed to the Australian people via student loans….We think about 25 per cent of it never gets paid back. So, we have to try and make these ends meet. We do," he told fellow panelists.

The final Budget will be unveiled next Tuesday night.

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