Monique Ryan pushes to move Hecs indexation date: ‘You wouldn’t accept that on your mortgage’

The independent MP Monique Ryan will introduce a bill today to move the Hecs indexation date.

Why? Because at the moment, if you have a Hecs debt, you’ll be making payments out of your paycheque over the course of the year, but none of that is actually applied to the balance until after your tax return is submitted, which is in July.

But indexation – which increases the debt in line with either inflation or the wage price index – is added before your payments are applied. Which means you’re being indexed on debt that you’ve already paid off.

If that date was changed, it would save university graduates $3.2bn over ten years, according to costings by the Parliamentary budget office, commissioned by Ryan.

She told RN Breakfast this morning:

You end up paying indexation, which is effectively interest, on debt that you’ve already repaid. You wouldn’t accept that on your credit card, you wouldn’t accept on your mortgage, but we’re expecting graduates to basically end up paying back more than they should on their HECS debts. I asked [education minister] Jason Clare about this in the House a couple of weeks ago and he can’t give us a time frame. He acknowledges the unfairness of the indexation. He’s done that before. He’s also acknowledged the unfairness of the Job Ready Graduate Scheme, which doubled the cost of arts, law, finance, and economics degrees under Scott Morrison, but which has now been in place longer under Anthony Albanese.

You end up paying indexation, which is effectively interest, on debt that you’ve already repaid. You wouldn’t accept that on your credit card, you wouldn’t accept on your mortgage, but we’re expecting graduates to basically end up paying back more than they should on their HECS debts.

I asked [education minister] Jason Clare about this in the House a couple of weeks ago and he can’t give us a time frame. He acknowledges the unfairness of the indexation. He’s done that before. He’s also acknowledged the unfairness of the Job Ready Graduate Scheme, which doubled the cost of arts, law, finance, and economics degrees under Scott Morrison, but which has now been in place longer under Anthony Albanese.