There are calls for the Federal Government to raise taxes on fossil fuels to pay down the spiralling student HECS debt. Struggling students and graduates are preparing for a near five per cent increase on their loans as a result of indexation.

Canberra

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Calls are being made for the Federal Government to implement a tax increase on fossil fuel industries to help pay off the growing student Higher Education Contribution Scheme (HECS) debt. With student and graduate debts set to rise by almost five per cent due to indexation, the financial burden is becoming increasingly concerning. This proposed tax hike on fossil fuels aims to alleviate the financial strain on those pursuing higher education.

As students graduate, they face substantial debt, with 11 students highlighted as owing over three quarters of a million dollars in tertiary loans together. This situation reflects a broader issue, with approximately 3 million graduates expected to see their loan balances increase by 4.7% due to indexation effective from June 1. This increase has prompted discussions on the sustainability of such debts, with many expressing feelings of despair over their future financial situations.

The debate over how to address this issue has brought forward the suggestion of taxing the fossil fuel industry more heavily. Last year, the revenue generated from students repaying their HECS debt was double that of the revenue from the special petroleum resource rent tax. According to Economist Professor Andreas Chai, redirecting a portion of fossil fuel export revenues to cover the national HECS debt could offer a quick solution amidst the cost of living crisis. He criticizes the current method of applying indexation to student loans, arguing that it disproportionately affects students and graduates by tying their debt increases to the Consumer Price Index (CPI), which includes factors like rising house prices that are beyond their control.

In light of these concerns, Prime Minister Anthony Albanese has hinted at prospective reforms in the upcoming May Budget, suggesting that the government is considering measures to make student loans more manageable and equitable for young Australians. This announcement has been met with anticipation from those affected, who are hopeful for relief from their financial burdens.



Calls to tax big polluters to pay for HECS debt

When these 11 students finally don their graduation gowns, they'll owe more than three quarters of a million dollars in tertiary loans. Will I pay it off in the end, like will I just have this debt for the rest of my life? I think students are getting very tired of being advised to pull themselves up by their bootstraps. They'll join 3 million graduates who will see their loans hiked by 4.7% indexation on June 1. It's going to be hanging over my head for decades. Yeah I think the word to sum it up is despair. So how to ease the burden? Is raising taxes on the fossil fuel industry an answer? Last year they collected twice as much revenue from kids repaying their HECS debt as they got from the special petroleum resource rent tax. 10% of those exports a year could pay off the total national HECS debt. Economist Professor Andreas Chai says it's a quick fix in a cost of living crisis. It's absolutely urgent. He also claims the way indexation is applied to students is unjust, as CPI is based on a basket of goods which includes rising house prices, something they have no control over or can afford. It's almost like a tax of house prices on Gen Z, that just doesn't make any sense at all. In the May Budget, Prime Minister Anthony Albanese has made it clear that Labor could do a lot more to make life easier for young people, indicating an announcement will be made pretty soon on making student loans fairer and simpler. Mate, give us a break. Give us a break. Maybe he will in the May Budget.

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