Hi supporters!
It is hard to believe that if we don’t succeed in freezing indexation for 2024, student debts will all increase in about 6 weeks. That means that we don’t have long to make our voices heard as we demand an indexation freeze.
Why freeze indexation?
HECS-HELP repayments come out of your weekly income if you earn above the threshold for repayments. However, indexation is applied on June 1, before the collected funds from the year are taken off the debt. This is wrong. Until we can work out a fair solution, then indexation must be frozen.
Indexation has a disproportionately negative impact on women. Women are paid less in nearly every sector of the workforce. Women also take more of the responsibility of childcare and are working part time in larger numbers. This means that women take longer to pay off their loans and are more negatively impacted by HECS-HELP indexation than men. This is a breach of the Sex Discrimination Act, which recognises the need to prohibit, as far as is possible, discrimination against people on the grounds of sex. HECS-HELP indexation is indirect discrimination, which occurs when a requirement or condition is neutral on its face but has a disproportionate or unintended negative impact on particular groups. (Source: Attorney-General’s Department. Rights of equality and non-discrimination). Until this is addressed and resolved, indexation MUST be frozen.
Indexation is simply compound interest by another name. Indexation was introduced to keep the principal debt at current prices and allow for inflation. If the government were genuine in this assertion, then indexation would only be applied to the original debt each year. Instead, the indexation is being compounded - it is applied to the total amount each year, which includes the indexation of each previous year. This means that, for many Australians, their debt is rising by a greater amount than the annual repayments. Many graduates are now simply paying back indexation each year and not making progress on their principal debt. Until this issue is addressed and resolved, indexation must be frozen.
Banks now require home loan applicants to state their HECS-HELP debt as part of their loan application. Until there is an investigation on the impact of HECS-HELP debts on loan applications, indexation must be frozen.
There is very little transparency in the HECS-HELP repayment process. It is difficult to find out what your debt is, minus the garnished funds from your pay, because the collected funds are not taken off the debt until the next financial year. Until the process is made more transparent, indexation must be frozen.
There is little, if any, informed consent on the HECS-HELP loan application process. Teenagers are finding themselves in crippling debt and have no hope to repay it. We do not have to look far to see the impact of debt on young Australians. The Robodebt scandal clearly showed the close relationship of debt and adverse mental health outcomes. We should be doing everything possible to help our young people navigate the difficult world they find themselves in, without saddling them with decades of debt. Until we can formally investigate the impact of student debt on mental health, indexation must be frozen.
I am calling all concerned Australians to contact their local politicians, senators and other decision makers to freeze indexation in 2024.
To contact your federal MP directly, here is a helpful website - just put in your postcode and it will give you their name and contact details. https://www.aph.gov.au/Senators_and_Members/Guidelines_for_Contacting_Senators_and_Members
Here’s hoping that in 2024, we can say NO MORE to the unjust system of HECS-HELP indexation.
Optimistically yours,
Gemma