Australian Greens Senators' Additional Comments

1.1This bill amends the Higher Education Support Act 2003 to create a fifth category of income contingent loans, STARTUP-HELP, and additional measures, including those which allow students undertaking accelerator program courses to potentially qualify for certain social security payments and amendments to the Australian Research Council Act 2001.

1.2The comments below relate to the concerning impact of the proposed STARTUP-HELP as a new type of Higher Education Loan Program.

1.3The student loan system is deeply unfair and is causing immense financial and emotional stress for too many people. On June 1 this year, more than 3 million people will be hit by a student debt avalanche as their debts balloon by a whopping 7.1 per cent - the highest indexation rate in decades.

1.4The average student debt of $24,770.75 will rise by $1,758.72 and for more than half a million people with debts of around $40,000, it will add another $2,840 to their student debt. This increase in student debt comes on top of the 3.9percent rise last year in June.

1.5Students and graduates are really struggling under the burden of soaring debt especially as a cost of living crisis is raging. This is made even more unfair by the fact that real wages are falling and inequality is rising.

1.6Growing student debt is exacerbating inequality as it disproportionately impacts many people including First Nations people, people from lowsocio‑economic backgrounds, rural and regional people, young people and those on low incomes.

1.7Student debt is especially exacerbating gender inequality, with women having larger debts and earning less than men.

1.8These concerns and inequalities were highlighted during the inquiry into the bill. While supporting the bill, several witnesses and submissions to the inquiry noted that taking on extra debt under the new STARTUP-HELP scheme could pose a risk or act as a barrier for students who may participate in the accelerator course program.[1] Some stated that the debt could act as a disincentive to participation from First Nations students, women and people of colour.[2]In its submission to this inquiry, the Australian Technology Network of Universities observed that:

... students from less financially well-off backgrounds are still more sensitive to upfront costs (including implicit opportunity costs from not working) and incurring debt.

This is a particular concern with Startup Year compared with the existing educational opportunities supported by the HELP scheme, given there is a higher risk of students exiting Startup Year with fewer tangible benefits than students undertaking an established qualification.[3]

1.9The Australian Academy of Technological Sciences and Engineering also noted that the current student loan system disproportionately disadvantages women:

The high course fees for accelerator programs – with the maximum level set at the same rate as medicine, dentistry, and veterinary science – will contribute to this problem, particularly in the current high interest rate environment. This may be a deterrent for women’s participation in accelerator programs – despite the potential of these programs to kickstart their careers.[4]

1.10Professor Mark Evans, the Deputy Vice-Chancellor of Charles Sturt University, agreed that this scheme could disadvantage already disadvantaged people. Henoted that Charles Sturt University’s internal evidence from student surveys suggests strongly that students are very concerned about taking on additional debt, particularly students from low-socioeconomic backgrounds.[5]

1.11Given that similar and strong concerns were raised by witnesses and submissions to the recent inquiry by this Committee into the Education and Other Legislation Amendment (Abolishing Indexation and Raising the Minimum Repayment Income for Education and Training Loans) Bill 2022, it is crystal clear that the student loan system is not working and needs to be fixed.

1.12Yet, on 17 April 2023, the Labor and Coalition Senators on this Committee ignored loud calls from unions, students, graduates, young people, women and experts to support a Greens bill which would abolish indexation on debt and raise the minimum repayment income to the median wage.[6]

1.13Increasing Youth Allowance and other income support payments to $88 per day is a necessary and urgent step to support students.

1.14We reiterate the call for the Government to take immediate steps to abolish indexation on all student loans and raise the minimum repayment income to the median wage. This will remove some of the unfairness in the system, provide much needed cost of living relief, restrain the astronomical rate of student debt growth, and help with the well-being of so many people.

1.15University and TAFE should be free, and all student debt wiped. No one should be shackled with tens of thousands of dollars of debt that can take a lifetime to pay off, just to pursue higher education.

1.16Education should be free for everyone, whether they are leaving school, changing careers, retraining later on in life, or looking to gain new skills and knowledge. Education is a right, not a privilege, and the benefits of tertiary education extend well beyond the individual to society as a whole.

Senator Mehreen Faruqi

Member

Greens Senator for New South Wales

Footnotes

[1]See, for example, Mr Luke Sheehy, Executive Director, Australian Technology Network of Universities, Proof Committee Hansard, 17 April 2023, pp. 3, 5; Professor Mark Evans, Deputy Vice-Chancellor (Research), Charles Sturt University, Proof Committee Hansard, 17 April 2023, p. 15; Ms Jeanette Cheah, Chief Executive Officer and Co-Founder, The Hacker Exchange Pty Ltd, Proof Committee Hansard, 17 April 2023, p. 19.

[2]See, for example, Professor Mark Evans, Deputy Vice-Chancellor (Research), Charles Sturt University, Proof Committee Hansard, 17 April 2023, p. 15; Ms Jane O’Dwyer, Chief Executive Officer, Cooperative Research Australia, Proof Committee Hansard, 17 April 2023, p. 22.

[3]Australian Technology Network of Universities, Submission 2, p. 4.

[4]Australian Academy of Technological Sciences and Engineering, Submission 3, pp. 1-2.

[5]Professor Mark Evans, Deputy Vice-Chancellor (Research), Charles Sturt University, Proof Committee Hansard, 17 April 2023, p. 15.

[6]Senate Education and Employment Legislation Committee, Report: Education and Other Legislation Amendment (Abolishing Indexation and Raising the Minimum Repayment Income for Education and Training Loans) Bill 2022, April 2023.