Currently, there are 3 million Australians with outstanding student debts; over 66% of these debtors are represented by Australians aged between 20 and 40. The demographic represented includes low-income earners and young families already facing financial hardship due to the rising cost of living. In the context of this inquiry, we are concerned that some of the most vulnerable Australians will regress on paying off their student debt when the legislated indexation takes effect on June 1st.
Increasing the repayment rate at the minimum income repayment threshold to meet indexation would be an inappropriate response during a time when Australians, especially young families, are struggling with the cost of living. Many experiencing financial hardship have been advised to reach out to the Australian Tax Office (ATO) to arrange deferring payments, but this is a temporary solution that does not address the accumulation of debt through annual indexation.
