New Graduates To Feel The Squeeze As HECS Debt Get Called In

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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.

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.

[Buzzfeed]


Comments

    Can't wait to hear the whinging! Surely it isn't unreasonable for some who 'borrowed' tens of thousands of dollars from the taxpayers to pay $416 per year back?

    "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.

    $8 per week is around 2 coffee's. Surely that won't break that bank.

    It seems like a good idea! All too often, I have seen students jumping from degree to degree, piling on HECS debt with little to no intention of actually paying it back. Also, considering most grad positions pay around $45-60K, it makes sense for recent graduates, who have obtained a job in their industry, to start paying back the degree the got them there in the first place.

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