Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

We all know that the new fee and loan repayment structures will see debt levels for future students doubling and trebling. But today I want to talk about the scale of the impact of the loan structures that will apply retrospectively to over a million Australians with existing HECS debt, be they current or former students. There are three prongs to the restructure. There is the reduction in the repayment threshold, the move from CPI to bond rate indexing and the introduction of compounding interest.

Together these will see the total interest obligations increasing by up to 700 per cent and will see existing debt levels double. For example, an engineering graduate will see the interest rate on their loan go from $9,300 to $37,000. This is an outrageous imposition on those who have made the big decision to commit to a higher education after assessing their future costs and benefits. As consumer law specialist Jeannie Marie Paterson said, it is like the banks forcing mortgagees onto a flexible interest rate after they have signed up for fixed interest rates. And as Minister Pyne told this parliament in 2010, 'It is a fundamental principle of law and regulation that if someone relies on laws and regulations at the time they should be able to rely'— (Time expired)