Federal Member for Flynn, Colin Boyce has called for changes to the Higher Education Contribution Scheme (HECS) in the Federation Chamber this week.
Mr Boyce said HECS debts are on the minds of many current and former students.
“That is because on June 1 each year, indexation is applied to an accumulated study and training debt,” Mr Boyce said.
“More than 3 million Australians saw their student debt rise with inflation last June as an indexation of 7.1 per cent was applied to the debts.
“It was the highest indexation in more than three decades, with an average $25,000 HECS debt rising by $1,775.
“My issue with the current HECS debt system is that interest is added to the loans before any payments made in the previous year are deducted.
“Given HECS debts must be considered in any home loan application, I am also concerned that a higher student debt will impact on the borrowing power of locals in the Flynn electorate.
“I am calling on the Education Minister to make significant changes to the current HECS debt system.
“The Government needs to examine what options can be taken to support Australians to pay down their debts, instead of denying it is a problem.
“This could include applying a cap on the indexation rate. Other changes could be made so that interest is added to the loans after any payments made in the previous year are deducted or both.
“All avenues need to be looked out.”
