I think it is time to rethink HECS-HELP debt repayments!
The Higher Education Contribution Scheme or HECS, was introduced in 1989 and has become embedded in the Australian higher education system.
It shifted a large proportion of the cost of higher education from the Commonwealth to students. With that, it enabled the expansion of the tertiary sector during a time of budgetary constraint.
Prior to that a generation of Australians had a free university education under Prime Minister Gough Whitlam. Gough Whitlam's free university education reforms led to legacy of no upfront fees
In 2005 HECS changed its name to HELP or the Higher Education Loan Program. Essentially, HECS-HELP is a loan program to help eligible students enrolled in Commonwealth supported places to pay their student contribution amounts. HECS-HELP debt has to be repaid through the taxation system once a person’s ‘repayment income’ is above the compulsory repayment threshold, even if you are still studying.
Not sure how HECS-HELP works? Take a dip here: StudyAssist
The compulsory repayment threshold is adjusted each year. For the 2020-21 income year, the compulsory repayment HECS-HELP threshold is $46,620. You can read more here about how the debt is calculated: ATO HECS HELP CALCULATOR Most university graduates would know exactly how it works and what they owe.
HECS debtors are required to begin repaying their loans when their 'HECS’ repayment income' reaches the compulsory repayment threshold. For most this can be within the first year in paid work.
Incentives for Allied Health & other professionals to relocate to the Regions
According to a report published in May 2018 on the Australian Parliament website, the total amount of outstanding HELP debt outstanding was said to be $54.0 billion for the 2016–17 financial year, $9.3 billion above the estimate of $44.7 billion contained in the 2017–18 Budget (p. 10-29).
If you are a stats or data person take a look here: Updated Higher Education Loan Program (HELP) debt statistics. The numbers are breathtaking.
How would a partial or total waiver of your HECS-HELP sound if you agreed to relocate and work in regional South Australia?
My initial conversations with post-grad students and a number of allied health professionals, set up in private or public practice in the regions, indicate they would relish the chance to count their regional service towards downsizing their debt. This could be applied to law graduates, teachers and more!
It makes sense and it makes cents. For every dollar of debt not required to be repaid (waived), the disposable income could be spent in the regional communities they live and work in. Think housing, consumables, and other costs of living.
I appreciate that this would need a conversation with the Commonwealth in the first instance. Imagine the opportunities this would generate if our State implemented a funding arrangement which sought to underwrite HECS-HELP debts for a raft of professionals willing to live and work in the regions? We could increase population growth and meet unmet needs with a range of professional services from legal to physio and more.
Want to share your thoughts on this? I would love to hear your views.
Please, have a seat with me.