The minimum repayment threshold for graduates with HECS-HELP debt will drop by approximately $10,000 next year, leaving graduates earning just over $45,000 out of pocket to the tune of $8 per week.
Reported by Buzzfeed, legislation passed the Senate on Monday that will make changes to the Higher Education Loan Programme (HELP) loan repayment scheme in a bid to reclaim some of the $54 billion of outstanding student debt.
The bill is expected to pass the lower house and take effect from 1 July 2019.
Tonight the Senate has passed our plan to tackle the $54 billion in outstanding higher education student debt, ensuring our world-class student loans scheme is sustainable for future generations #auspol
— Simon Birmingham (@Birmo) August 13, 2018
While these figures may improve the Federal budget, dropping the minimum repayment threshold $45,881 means that household budgets for recent graduates are going to become even tighter.
Under the new legislation, repayments will start at one per cent of a graduates income - or about $8.70 per week - and scales up as they earn more. Current repayments start at four per cent once a person earns $55,874 or more.
"This is a significant setback for a generation of young people already contending with increasingly precarious employment and soaring living costs," said Jeannie Rea, National Tertiary Education Union (NTEU) National President.
Other changes in the legislation include a cap on lifetime HECS loans of $104,440 (or $150,000 for medicine, veterinary and dentistry student). Anyone seeking to take out further loans will have to make payments to get under the limit.
There will also be a new maximum repayment rate of 10 per cent for anyone earning over $134,573.