Twenty five percent of student loans are unlikely to be paid.
With HELP debt likely to increase to A$75 billion in 2020, research from the US shows offering students financial literacy courses may be a gentler way to combat student debt.
HELP repayment arrangements have long term consequences for students and their families.
Senators should consider how repayment thresholds vary depending on family circumstances, the impacts on taxes and how long students will be saddled with debt.
Those already working will face tax increases of 1%-2% of their income from 2018.
The government should add a 'super payment option' that allows graduates to offset the cost of their HELP repayments.
The government proposes increases in the student contribution to course fees totalling 7.5%, and is lowering the first income threshold for HELP repayment.
NATSEM has modelled the impact of the changes to the HELP debt repayments the government announced this week.
The idea of adding student income support to their HELP debt has been floated, but student debt is already high.
A Grattan Institute report I co-authored highlights student debt costs, with the finding that the government could save $800 million a year by retrieving unpaid debts from deceased estates and students…