NEIL WILCOCK:
I know that a lot of people who are listening might have student debt if obviously you racked it up while you’re at school and then maybe, like, you’ve just been in the workforce for a little while, but you haven’t been earning enough to start paying things back, so maybe you’ve got quite a lot there. So, we’ve got MP Andrew Leigh on the phone. Good morning, Andrew.
ANDREW LEIGH:
G’day. Great to be with you.
WILCOCK:
Oh, there you are. Andrew, quickly, we know that you’re away at the moment, so you’re not in town. Is it because you’re going to be an Ironman? Is that what you were doing?
LEIGH:
Yes. I raced the Port Macquarie Ironman yesterday as my third Ironman. So, I think that now makes me the only politician stupid enough to have done all 3 Australian Ironman races.
COURTENAY KNEEN:
Oh, my goodness.
WILCOCK:
People would argue that you’re not the stupidest, you know, politician for this specific reason. And how did you go? What were your times?
LEIGH:
1:16 in the 3.8k swim, 6:19 for the 180k cycle and 3:46 for the marathon.
KNEEN:
Oh, my gosh.
WILCOCK:
And you’re just up this morning, just talking to us on Breakfast Radio.
LEIGH:
Nowhere I’d rather be.
WILCOCK:
I always thought to be a politician you have to be unhinged but this really does prove it. Let’s quickly talk about Higher Education Loan Program. So, obviously the Education Minister, Jason Clare, came out yesterday and said that this $3 billion worth of student debt is going to be wiped. What does that mean exactly?
LEIGH:
Well, for someone with an average HECS‑HELP debt of $26,000, that means their HECS debt will be cut by about $1,200. Or if you’ve got a HECS debt of $40,000, it means it’s cut by about $1,800. This is a response to a recommendation of the Australian Universities Accord which said that we shouldn’t see a situation in which HECS debts go up faster than wages. So, now we’re saying that, HECS debts will rise at the lower of either inflation or wage growth. And we’re backdating it to last year. So, the inflation spike that we saw last year won’t be reflected through in the indexation of student debts. They’ll be going up by wages rather than inflation.
WILCOCK:
That’s good, considering that wages really aren’t going up as quick as what we all need them to match the cost of living. And I know that, you know, governments right around the world are trying to get inflation under control and there’s so many different facets to it. It’s not just one thing, but this is good for a lot of students who may be thinking, ‘well, I’m kind of drowning in debt, and who knows if I’ll ever be able to pay this off,’ because when you think about it, like, over $40,000, that’s a lot of money.
LEIGH:
A lot of young Australians have spoken to us about this issue and we’ve listened. We know it’s an issue for people when they’re looking to take out a mortgage and move ahead in life. Those HECS debts can hang over people’s heads. HECS‑HELP is an Australian innovation, it’s been an important way of expanding access to universities, but we also need to look carefully about how it’s indexed. And this measure is going to make a big difference. We’re wiping about $3 billion of HECS debt for more than 3 million Australians. So, it’s a significant measure that’ll affect a lot of your listeners.
KNEEN:
So, the people who are listening and are going, okay, well, I’ve got a HECS debt and it’s up at around that 40 grand, and apparently I’m going to have this saving. Will it just automatically be applied and it’ll show up in their accounts?
LEIGH:
Absolutely. Nothing anyone needs to do this. It will just be showing up in your accounts. And that makes a difference for cost of living for many young Australians who are looking to make their way in the world, we’ve got to make sure that we’re expanding access to universities, but at the same time, not leaving people with crushing HECS debts.
WILCOCK:
Well, this sounds pretty good. I know a lot of my friends have only, you know, even in their thirties, just got to the stage where they’re paying HECS back. And it, you know, really is tough on the cost of living when you’re, you know, paying a certain amount in HECS and you sort of think, well, when am I actually ever going to get this out of the way? And it also having HECS, I didn’t realise until recently it actually affects you getting a home loan. So, you know, paying off your HECS faster is actually really important if you’re looking at buying a house.
LEIGH:
Absolutely. Now, again, HECS‑HELP has been really important in expanding access to universities, really critical in terms of providing a loan system where the repayments stop when you lose your job. It’s a way better system than they have operating in the United States where people have more classic student loans that can be crushing when they lose their job. But at the same time, we’ve got to get indexation right. And the Universities Accord panel made it very clear that we needed to cap the HECS‑HELP indexation rate. So, it was either the lower of either the consumer price index or the wage price index.
WILCOCK:
Andrew Leigh MP, thank you so much for joining us this morning. Now you can go and stretch.
LEIGH:
Thank you very much to you both. Lovely to chat.