Victory Spotlight: How a petition helped wipe out $3 billion in student debt

A Change.org petition with nearly 300,000 supporters prompted the Australian Government to announce reforms to the Higher Education Contribution Scheme (HECS), effectively wiping out $3 billion in student debt. This campaign, initiated by Dr. Monique Ryan, MP, provided relief to over three million Australians burdened with HECS debt.

What is HECS?

HECS, the Higher Education Contribution Scheme, is Australia’s government-run student debt system. Initially lauded as “the best debt you’ll ever have” as an interest-free loan, HECS loans were indexed according to the Consumer Price Index (CPI). However, the high CPI rates caused many Australians’ HECS debts to increase despite regular payments. Graduates, who found themselves paying more than they borrowed whilst struggling to cope with a cost of living crisis, were widely frustrated and in search of a solution.

The Rising Cost of HECS

More than 2.9 million Australians have a HECS-HELP debt, with an average of about $26,500. These debts increase each year based on indexation, which is calculated when the March quarter inflation figures are released. In 2023, this led to the highest indexation rate in more than three decades at 7.1 percent. Prime Minister Anthony Albanese acknowledged that the federal government needs “to do much better” regarding HECS in April 2024, yet everyday Australians continued to face the anxiety of ballooning debts. United States President Joe Biden wound back 4.3 million debts and cancelled 277,000 more, and Australians asked Prime Minister Anthony Albanese to do something for their students facing the same challenges.

A Cross-Generational Team: Mother Gemma and Daughter Baillie McWhirter

Baillie McWhirter, 24, had $50,000 in HECS-HELP debt from several degrees she was unable to complete due to struggles with Crohn’s disease, a chronic illness. “I’m never going to be able to work a real full-time job that has full-time hours because this chronic illness affects my fatigue and my mental health and my physical ability to walk around,” she said in an interview with the Canberra Times. “Then I think adding on top of that a $50,000 debt that is just impossible to do anything about, it’s honestly terrifying.”

Her mother, school teacher Gemma McWhirter, was 52 before she paid off her HECS deb – and she doesn’t want today’s generation of students to be burdened in the same way. Ms. McWhirter started her Change.org petition one year before Dr. Ryan, advocating for changes to the HECS debt indexation, and gained more than 35,000 signatures.

In an interview with St George & Sutherland Shire Leader, Ms. McWhirter said her debt doubled while she was out of the workforce raising her family. “Indexation is currently applied on June 1, just before the ATO applies the annually collected contributions from the PAYE taxation, which would significantly decrease the principal debt,” she said.

“In other words, the ATO is holding onto your money – not applying it to your debt, and then indexing you on the maximum amount they can while simultaneously holding onto your payments made throughout the year.”

“The bare minimum the government needs to do is delay the indexation until after the garnished funds for the year have been taken off the principal debt,” she said. “I can’t even see how the present system is legal.”

Ms. McWhirter believes many people don’t know how the debt is indexed and sees that as an injustice, especially for women who take time out of the workforce. “When you think about the pay gap that already exists in the workforce based on gender, it is further evidence of indirect discrimination against women,” she said.

Dr. Monique Ryan’s Petition Sparks a National Conversation

Dr. Monique Ryan, an Independent Federal MP, created her Change.org petition in March 2024 to call for the government to change how HECS debts are indexed. In the petition, she wrote, “Last year, over a million Australians saw their HECS debt grow faster than it was being repaid because of an unfair indexation system… Young people are facing a housing crisis, a cost-of-living crisis, and a climate crisis – they shouldn’t be facing a HECS debt crisis as well.”

A Student’s Initiative and A Call to Action

Dr. Ryan’s campaign was sparked by Phoebe, a Master of Physiotherapy student at the University of Technology Sydney (UTS) who reached out to Dr. Ryan after organising a letter-signing campaign among her peers to the Education Minister. Phoebe’s proactive stance highlighted the pressing need for change and inspired Dr. Ryan to champion the issue on Change.org.

Dr. Ryan’s commitment to delivering the petition to the Education Minister in person provided a tangible goal for supporters. She stated, “If you want the government to make HECS debts fairer, sign the petition and get your friends to do so too. I will walk into the Education Minister’s office in a few days and put this petition on his desk.” This clear call to action mobilised thousands of Australians.

Petition Gains Momentum and Goes Viral

The fact that HECS debts were increasing due to CPI indexing, despite regular payments, struck a chord with graduates and students who felt trapped by their student debt. The campaign quickly gained traction, thanks to Dr. Ryan’s viral videos which explained the issue and urged people to sign the petition. Dr. Ryan emphasised that the government collected more money from HECS debts than from its fossil fuel tax – pointing to a sense of injustice that resonated with many.

In just one week, Dr. Ryan’s petition gained over 121,000 signatures. As promised, she delivered the petition to Parliament, sparking a nationwide conversation. Thousands of Australians shared their stories of living with HECS debt and added their voices to the cause.

Influencer Amplification

Content creators and influencers like Punter’s Politics and Nariman spread the word on their platforms, reaching millions online.

In her video, Nariman explained that she didn’t realise that indexation would be added to her HECS debt. “I was under the impression that I’ll go to uni. I have this huge debt but can pay it off when I start earning enough, and the amount of money I owe from my uni debt doesn’t change,” she said. “But you have to pay interest rates based on where it’s at right now. And it’s not even making any difference into your debt, because you’re just paying interest. You think you’re paying off your debt, but you’re actually not.”

Nariman’s video exposed a reality many students were unaware of, driving a powerful wave of awareness and support. And her involvement didn’t stop there; she started her own Change.org petition calling for financial support for student placements.

The Victory

Six weeks after Dr. Ryan’s petition launched, and 288,000 signatures later, the Australian Government announced reforms to the HECS system. The reforms directly address the petition’s demands: HECS debts will be indexed to the lower of the Consumer Price Index or the Wage Price Index. In a remarkable victory, change will save three million Australians $3 billion in student debt.

In his response to the petition, Jason Clare, MP Federal Education Minister, wrote, “I want to thank you for raising your voice on this important issue. The Albanese Government has listened, and we are acting. Today I am announcing that we will wipe around $3 billion in student debt from more than 3 million Australians.”

Inspiring Further Change

This campaign created a sense of belonging and community among Australian students and graduates. Their actions, big or small, contributed to the success of the movement. The HECS petition inspired many more student debt-related petitions on the Change.org platform, and its victory is a testament to the voices of hundreds of thousands of Australians. Their collaboration and effort achieved a significant policy change that will provide financial relief to millions.

When Will I Get an HECS Credit or Refund?

As of July 2024, the legislation to change HECS indexation rates has not been approved by Parliament, so the old rates still apply. This means:

• June 1, 2024: Old indexation rate applied.
• July 1, 2024: New financial year began, but changes aren’t in effect yet.

The expected new rate is 4%, but it is currently still 4.7%.

Find more details on the Australian Government Department of Education site.

How Will the Credit be Applied and How Will I Get My HECS Refund?

If your HECS debt was indexed on June 1 2023 or 2024, you will get a credit on the amount you still owe. If you’ve paid off your HECS debt, the credit becomes a tax credit. Credits for ATO or Commonwealth debts will reduce what you owe, and if you don’t have a tax bill, it will be refunded to you.

Once the legislation passes, credits will be automatically applied to your HECS account. Ensure your bank account details are up to date with the ATO for refunds.

How Do I See My HECS Balance?

Check your HECS balance via MyGov, which links to services like the ATO. If you don’t have a MyGov account, create one and link it to the ATO. You can access your account online or via the app.