Treasurer Jim Chalmers flags support for student debts, unpaid placements in Federal Budget

Students saddled with unpaid placements and soaring debts could be in line for relief in next month’s Federal Budget, the Treasurer has hinted.

Students and recent graduates saddled with ballooning debts and those partaking in placements for subjects like teaching and nursing are in line for relief in the upcoming federal budget.

Speaking to reporters in Canberra, Treasurer Jim Chalmers hinted at measures designed to ease education costs at a time of heightened inflationary pressures.

“Whether HECS relief, or assistance for people on prac, on placements, as they finalise their degrees, we are looking at both of those things for the budget,” Dr Chalmers said on Monday.

“We do acknowledge that students are under pressure, and if we can afford to do something to help on that front, that’s obviously something we’ll consider.”

Students and recent graduates could be in line for additional support in the May budget, Treasurer Jim Chalmers has flagged. Picture: NCA NewsWire / Martin Ollman

The Higher Education Contribution Scheme (HECS), now replaced by the Higher Education Loan Program (HELP), is indexed annually on June 1 to the March quarter headline inflation reading.

The indexation rate that will apply from June 1 is set to be determined on Wednesday when the latest quarterly inflation figures are released. Economists are expecting an increase of 3.5 per cent.

For a student or graduate with the average debt of $26,494, their loan would grow by an additional $927.29 if inflation rose in line with consensus forecasts.

The mooted support follows the release of the Universities Accord earlier this year which recommended that student debts should instead be pegged to the lowest of either the wage price or consumer price indices.

The burden of unpaid placements and internships in courses such as nursing, teaching and physiotherapy were also identified in the Accord, with the review recommending government and industry fund placements to help ease the costs on students.

Students have been saddled with soaring debt repayments and unpaid placements during a period of heightened cost of living. Picture: NCA NewsWire / Jeremy Piper

With the recent rise in student debts, Coalition education spokesperson Sarah Henderson remarked that the government taken “no action” to ease the burden of indexation.

“While more and more Australians are caught in a student debt trap, Labor has been tone deaf to the cost of living crisis so many young people are facing,” Ms Henderson said.

Kooyong independent Monique Ryan, who has launched a petition calling for an overhaul of the indexation process which has amassed more than 270,000 signatures, said that over one million Australians had seen the growth in their student debts had outpaced the amount they had repaid.

“With people already facing a housing crisis and a climate crisis, we don’t need a HECS crisis as well,” Dr Ryan said.

“I look forward to seeing exactly how the government proposes to make HECS debts easier to pay off.”

Greens education spokesperson Mehreen Faruqi has also added her voice to calls for student debt relief, calling on the federal government to abolish indexation altogether.

“Financial costs should never be a barrier to education. Yet the reality is, young people today are rethinking university after witnessing years of skyrocketing student debt under the Albanese government,” senator Faruqi said.

The federal budget will be handed down by Dr Chalmers on May 14.

Originally published as Treasurer Jim Chalmers flags support for student debts, unpaid placements in Federal Budget