Student debt wiped, and students will be paid to go on placement

And so two bits of policy news over the weekend from down under very much caught my eye.

The first concerns student debt – where the interest rate for HECS (Higher Education Contribution Scheme) and HELP (Higher Education Loan Program) have traditionally been linked to the Consumer Prices Index.

The schemes are similar to those here insofar as there’s a repayment threshold ($51,550, roughly £27,172), but dissimilar insofar as there’s no write-off term (although debt is wiped on death).

These are student loans designed to be paid off – the repayment rate increases as income rises, starting at 1 per cent and going up to 10 per cent of income for higher earners.

The problem last year was that CPI was growing much faster than wages – which meant that many more loans than usual were growing faster than Australians could pay them down.

Now education minister Jason Clare has announced a kind of “double-lock” – the indexation rate will instead be linked to whichever is lower of CPI or the wage price index (WPI).

This will wipe out what happened last year and make sure it never happens again.

About 3 million Australians hold student loan debt, at an average of $26,500 – and the measure is set to cut about $1,200 from their balance.

Meanwhile following recommendations in the Universities Accord, the Albanese Government has announced that it will pay students undertaking compulsory work placements across teaching, nursing, midwifery and social work disciplines.

The Commonwealth Prac Payment will provide around 68,000 eligible higher education students with $319.50 per week during their clinical and professional placement periods.

Skills and Training Minister Brendan O’Connor:

This is an additional payment to support nursing TAFE students who have extra costs such as uniforms, travel, temporary accommodation or child care, during mandatory clinical placements.

Universities Australia CEO Luke Sheehy:

These students can’t graduate without practical experience, but too many are being held back by placement poverty which can be the difference between commencing and completing a degree. This isn’t good for students or key areas of our workforce which are crying out for more graduates.

Unlike in Westminster, this is very much education spending announced by the Ministers for Education and for Skills and Training – our weird cut n shut of student finance arrangements driven by spend and subsidy from the Department for Education (DfE), and top up arrangements from the Department of Health (made even more complicated once you spot that some of the former is devolved, but some isn’t) make an announcement of this clarity impossible without some machinery of government shenanigans.

But it’s at least a signal that even if alleviating student poverty doesn’t sound like it would attract a priority status in Westminster politics, the training (and costs) of future public servants can be framed as another, more positive story.