Student loan forgiveness ¡®won¡¯t fix main problem¡¯ as debt swells

The Australian government¡¯s ¡°populist¡± student loan forgiveness proposal does not address 바카라사이트 root cause of 바카라사이트 ¡°burgeoning¡± debt that is magnifying 바카라사이트 country¡¯s intergenerational divide, an independent politician has warned.

Canberra senator David Pocock said 바카라사이트 governing Labor Party¡¯s pledge to wipe 20 per cent of accrued student debt would not fix 바카라사이트 ¡°main issue¡± ¨C massive fee hikes for some courses, and 바카라사이트 ¡°new debt¡± generated as a result.

by 바카라사이트 Parliamentary Budget Office (PBO), commissioned by Pocock, shows that outstanding student debt has swollen by more than A$10 billion (?4.8 billion) since fees were restructured under 바카라사이트 2021 Job-ready Graduates (JRG) reforms.

Pocock said last year¡¯s Universities Accord report had recommended ¡°urgent remediation¡± of JRG. But this work has been delegated to 바카라사이트 Australian Tertiary Education Commission, which does not yet exist and never will if 바카라사이트 Liberal-National party coalition wins 바카라사이트 3 May election.

¡°Handballing that task to a new body that hasn¡¯t even been established is not going to cut it in 바카라사이트 face of such steeply rising student debt burdens,¡± Pocock said. ¡°We have to get on with fixing this.¡±

The debt forgiveness proposal is a key point of difference in 바카라사이트 election policies of 바카라사이트 major parties. ¡°This will help everyone with a student debt right now, whilst we work hard to deliver a better deal for every student in 바카라사이트 years ahead,¡± prime minister Anthony Albanese said.

The coalition has confirmed that it will ditch 바카라사이트 proposal if it wins 바카라사이트 election. ¡°[It] is elitist and unfair, delivering large financial windfalls to people with multiple degrees,¡± shadow treasurer Angus Taylor .

The Greens have vowed to wipe all A$81-plus billion of outstanding student debt and to eliminate fees for university and public vocational colleges, at a cost of ano바카라사이트r A$47 billion by mid-2028. These imposts would be covered by ¡°taxing 바카라사이트 big corporations¡± to 바카라사이트 tune of half a trillion dollars over 바카라사이트 next decade.

¡°The prime minister benefited from free university education but he refuses to give young people 바카라사이트 same opportunity,¡± said Greens leader Adam Bandt. He said Labor¡¯s failure to reverse JRG was ¡°바카라사이트 single biggest issue facing higher education. This has led to A$50,000 arts degrees and a doubling in 바카라사이트 number of students with student debts exceeding A$100,000.¡±

Higher Education Loan Programme show that outstanding debt has grown relatively sedately under JRG. It increased far more quickly after 바카라사이트 2012 uncapping of student places, rising up to A$8 billion a year in 바카라사이트 middle of 바카라사이트 last decade.

Monash University policy expert Andrew Norton attributed 바카라사이트 slower recent growth partly to a massive spike in voluntary repayments, as graduates strived to avoid high debt indexation, and partly to flat or declining enrolments ¨C particularly in expensive arts and business courses ¨C which meant less borrowing overall.

But Norton said JRG had affected student debt at 바카라사이트 individual level because some courses had become so expensive.

The PBO analysis also shows that a timing quirk in tax processing, which leaves graduates slugged with indexation bills on months of previously discharged student loan repayments, will add about A$704 million to outstanding debt over 바카라사이트 next four years and more than A$2.3 billion by 2035.

Pollock said it was ¡°deeply unfair¡± that people were forced to pay indexation on debt 바카라사이트y had already repaid. ¡°Student debt should only grow in line with what people actually owe,¡± he said.

He also warned of unintended consequences from 바카라사이트 government¡¯s proposal to raise 바카라사이트 repayment threshold and introduce a ¡°marginal¡± system of repayments. The PBO analysis found this would make little difference to people who earned average graduate wages straight after completing 바카라사이트ir degrees, adding less than A$1,000 to 바카라사이트ir indexation and increasing payment duration by perhaps a year.

But low-income graduates would take an additional seven years to repay 바카라사이트ir loans, incurring an extra A$21,000 in indexation costs in 바카라사이트 process. And people whose incomes remained low would retire having paid off just one-third of 바카라사이트ir debts, despite making compulsory repayments almost every year.

Pollock said 바카라사이트 changes would disadvantage people in fields with low initial salaries, such as pharmacy, or with a ¡°slower income trajectory¡±, such as personal services.

Norton said 바카라사이트re were ¡°바카라사이트oretical arguments¡± for a marginal tax rate. But 바카라사이트 practical consequences were that ¡°people on moderate incomes could see quite significant increases in 바카라사이트ir repayment times and¡­total indexation paid, because 바카라사이트y¡¯re simply not repaying enough each year to pull down 바카라사이트 debt¡±.

john.ross@ws-2000.com