Speech: Tackle the student debt crisis

2022-09-28

Today I rise to speak about the urgent need to tackle the student debt crisis. Each year we send thousands of students out into the world with a burden of increasingly large, crushing debts that hold them back. The Greens are the party of public education and we have a clear and steadfast position on this: student debt should not exist; university fees should not exist; student poverty should not exist; education should be free, fully funded and properly resourced for everyone at every age, from early childhood through to university and TAFE.

We took to the recent election a radical plan for higher education. We were the first and the only party to commit to abolishing all outstanding student debt, and this includes forgiving outstanding debts from the grossly unjust Student Financial Supplement Scheme. The scheme was a rort that targeted low-income and disadvantaged students from the start. For the government to continue to collect debts on SFSS 15 years on from its abolition is simply unconscionable.

We outlined our position to make TAFE and university free and to guarantee a liveable income for students. Our plan to wipe every last cent of student debt costs less than one-third of the cost of the stage 3 tax cuts. Unlike those tax cuts, which put money back into the pockets of the wealthiest and the billionaires, our plan primarily benefits people on low and middle incomes, young people and women.

Cancelling student debt would be a powerful way to narrow the inequality gap. Abolishing all student debt would have an enormous positive impact on the daily lives of millions of people, especially young people, who would be able to afford to live a better life. When I announced the Greens plan to abolish student debt, people shared with me what this would mean for them. I'll share a few of those comments today.

It will mean I can get on with working and building a life without worrying about debt.

It means I can save up to enter the property market earlier.

Not only will it provide immediate mental relief, but would enable me to be able to pursue meaningful personal goals as well as approach each day more positively. Education is an asset to society, it should not be commodified for profit.

Those are only some of the comments I received.

It's no wonder that our policies are resonating so well with younger voters, who understand that the major parties have abandoned them and that the Greens is the party that cares for them. Unfortunately, we know this government did not take to the election a vision to make the big sweeping changes needed to transform and drastically improve education in this country, just as they did not take to the election a plan to fix the housing crisis or the climate crisis. But they must be pushed to do more and do more quickly, and that's what the Greens are here to do. Immediate steps can be taken to provide cost-of-living relief to students and anyone with a study loan as we work towards the abolition of all student debt and a future where TAFE and university are free for all.

More than three million people in Australia owe a total of around $70 billion in outstanding student debt. More than 1.3 million of those people have debts greater than $20,000. Significantly more women have study debts than men. It's no small problem, and it's not one we can afford to ignore any longer as fees hiked up by the Morrison government's terrible Job-Ready Graduates Package will drive up debt even higher, and it will take longer for students to pay it off.

Young people are already bearing the brunt of the cost-of-living crisis, just as they bore the economic brunt of the COVID-19 pandemic due to rising rents, insecure work and stagnant wages. Add to that ballooning student debts that can take decades to pay off and government inaction and this can't be seen as anything other than punching students and graduates while they're already down.

The hip-pocket harm of having exorbitant student debt repayments withheld from pay cheques isn't the only harm we're seeing done by this. Only last week we saw renewed testimony from people with study debts and lenders that outstanding HELP debts are preventing people from getting finance for a house or are severely limiting the amount that they are able to borrow. It's tough enough to find secure housing as it is. Allowing the problem of student debt to go unaddressed will only make it worse in the months and years to come for so many people.

As reported in the Guardian Australia, for a Brisbane woman called Tracy her debt proved an obstacle last year when she tried to get a $20,000 loan to replace her 27-year-old car. She said, 'I had a lot of trouble with my borrowing capacity because of my HECS debt.' Even if there were no cost-of-living crisis, we have to be clear on the principle that underscores all our efforts for free public education and an end to student debt. High-quality education is a basic right that should be universal and free, not a privilege reserved for those who can afford to pay for it. Yet for those studying in higher education this debt keeps going up and up.

The abolition of student debt is really not a new idea, nor should it be a controversial one. If Joe Biden 's mostly boring, mostly centrist government can wipe student debt of more Americans than Australia has HELP debtors, then we certainly can do the same. The cancellation of those debts is a credit to the work of activists and students in the US, whose work has brought us to this.

The last decade has been a particularly tortured time for students and graduates in this country, with surveys in this period showing that two-thirds of university students live below the poverty line and at least 15 per cent of domestic full-time students go without food or necessities because they just cannot afford them. They are in this state largely due to almost a decade of disgraceful attacks on higher education by the Liberal coalition government. In 2016, and again in 2018, fresh from a few failed attempts to jack up uni fees, the Liberals introduced legislation which significantly lowered the minimum repayment income for student loans to hike the rate and pace of repayments. Without the Liberals' changes, the minimum repayment income today would be more than $63,000, significantly higher than the $48,000 it is today. These cuts to the minimum repayment income were incredibly cruel. No-one with a study debt should repay a cent of that debt until they are earning above the average wage and are genuinely in a position to do so without suffering financial hardship. The changes resulted in thousands upon thousands of graduates being forced to start repaying student loans before they could find their feet and long before they were making an average wage and could afford to make those repayments.

When 2020 rolled around, the Liberals came back for another go at university fees and funding with the disastrous Job-ready Graduates Package, which hiked fees, cut funding and massively shifted the cost of delivering a university education away from the government and onto students. The fee changes were no small tweaks either. They more than doubled the fees for degrees like arts and commerce to more than $14,000 a year. On average, the package drove up fees for women by 10 per cent, compared to six per cent for men.

With the fee hikes came the enormous cuts to teaching and learning funding, which have since forced universities to teach more students with less money across the board. The funding cuts and fee hikes must be undone and reversed urgently. This June, with inflation skyrocketing, 3.9 per cent indexation was applied to all student debt, adding more than $900 to the average student debt. For many students, that figure was much higher. That 3.9 per cent was the highest indexation rate in a decade. But with inflation not yet at its forecast peak it's on track to get even worse in 2023.

These events are fuelling the explosion in student debt, which is hurting students today and urgently needs to be addressed. While average house mortgages doubled in the 15 years to 2021, average student loans almost tripled. Over the past 20 years, the proportion of debts worth over $10,000 has also increased dramatically, from 47.5 per cent in 2005 to more than 72 per cent today. ABS data also show that in 2021 more than 27,000 people had loans in excess of $100,000. For the benefit of millions of people in the country, instead of giving tax breaks to the wealthy, let's abolish all student debt.

 

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