Colin Boyce (Flynn, Liberal National Party) Share this | Link to this | Hansard source

HECS debt is on the minds of many current and former students. That is because on 1 June each year indexation is applied to the accumulated study and training debt. More than three million Australians saw their student debt rise with inflation last June as indexation of 7.1 per cent was applied to these 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 these loans before any payments made in previous years are deducted. Given that HECS debt must be considered in any home loan application, I'm also concerned that higher student debt will impact on the borrowing power of these people. I'm calling on the Minister for Education to make significant changes to the current HECS debt system, whether it be to apply a cap on the indexation rate or to change it so that interest is added to loans after any payments made in the previous year are deducted or both. All avenues must be explored. The government must seriously examine what options can be taken to support Australians to pay down their debt instead of denying that HECS debt is a problem.