Curious what OzBargainers think of the various HECS-HELP loan forgiveness programs the Labor Government is buying votes with has announced over the past few months. My wife saw an article on facebook and people were pretty mad about it, but that was back when it was only a de-rating of the 7% interest down to 4% or whatever. I’m a bit mixed on it. Hard to say I have strong feelings other than annoyance at how the Aussie system is always changing rules post-hoc.
There are two major changes:
- Changing of interest rate from CPI to the lower of WPI or CPI. This will be backdated a couple years back to when we had that 7% interest event.
- Reducing repayment thresholds and forgiving 25% of all outstanding balances. The 25% forgiveness offsets the fact that lower repayment schedule = more interest paid over loan lifetime.
Personally I will have a small benefit from both policies, although it’s slightly annoying in that I have made voluntary repayments prior to the 7% interest slug.
IMO the 25% discount is literally just buying votes. If the repayment schedule is to be reduced to match the original intention of the scheme, then what’s wrong with the total expected interest payments that were also part of the original intention of the loan? Nothing except it’s a point of weakness before an election.
I think the ALP is just picking up American political issues of the day.
Student debt is a massive problem over there, but not here.
The real interest rate is zero percent. it is just indexed for inflation.
And badly. They are just shifting many billions of dollars in debt to the general public. Including those who never had a subsidised tertiary education.
The best part for Albanese is that it hardly affects his budgets - the load is dumped on future governments to raise taxes or cut spending to pay for it. Brilliant!