What Labor’s $16 billion student debt cut could mean for North Shore graduates

Plans from the Labor government to wipe $16 billion in student debt could cut the average HECS loan by around $5000. With the Coalition calling the proposal “profoundly unfair”, the potential relief to Australian students looks like it will be decided by the result of the federal election.

In February, Minister for Education Jason Clare announced a re-elected Labor government would cut 20 percent of all student loan debt in 2025. This followed changes to the indexation of HECS debt in the 2024-25 Budget — which adjusted the indexation of student debt to be calculated from the lowest of either the consumer price index or the wage price index.

But the election pledge from Labor means that, if you are a recent graduate or a student looking at beginning to pay off your HECS debt, waiting to see the result of the May 3 federal election may be wise.

Labor has stated that this cut to debt is "subject to the passage of legislation", meaning its implementation may hinge on the current government's re-election.

As of 2021 in the North Shore area, more than 35,000 residents were studying at a tertiary education institution such as University or TAFE, giving the region one of the highest populations of students outside of the inner city.

Speaking to some local students, it seems this measure, while welcome, doesn’t do enough to address core issues affecting our economy and education system.

“I think paying less for education always helps, especially in our current economy”, Oskar, a Killara resident and Architecture student at Sydney University, told the North Shore Lorikeet.

“In my opinion, this HECS subsidy is good for the short term, but I don’t think it will make a massive difference in the long term.”

“My parents didn’t have to pay for their education, as university tuition was free, supported by the Government, which is what I think it should be like! I feel like the education system has definitely been more ‘monetised’ in some sort of way, or, a better way to put it, made into more of a business for profit.”

Hana, a student living in Cremorne, was also critical of the proposal, stating they found the policy “frustrating” as Labor was “in a position now, with a majority government, to implement this before the election.”

Both students pointed out the policy fails to address a more immediate issue for young people: housing.

While it seems the policy is welcomed by students burdened by exorbitant tuition fees, there is an apparent desire for larger, systemic reform in our higher education system and beyond.

Opposition MP Paul Fletcher has previously decried this policy as “profoundly unfair”, saying it prioritises relief for people who have gone through tertiary education.

If the LNP’s track record on tertiary education is anything to go by, this opposition to reducing the cost of higher education is unsurprising. It was the Job-ready Graduates scheme, introduced under the Morrison government in 2021, that saw degree prices soar, doubling costs for some students.

Labor currently holds a majority government, but that’s liable to change in the upcoming election. While Liberal and National candidates have been outspoken against this measure, it seems likely that it would be supported in the lower house by many of the current Independent MPs — such as Zali Steggall and Monique Ryan — who have previously voted in support of policies providing HECS debt relief.

Thumbnail image: Dom Fou (left), Dylan Gillis (right)