31 Jul 2014

Possibly the best person to talk about any specific project is the person who created it and the creator of the HECS scheme Bruce Chapman is not a fan of the proposed budgetary changes to HECS.

If you haven’t seen any of the angry blogs or protest videos on your Facebook timeline, here’s a simple explanation. The proposed changes meant that the interest you would pay on your HECS debt would be moved to the Government Bond Rate, a much higher rate than the one currently used.  In layman’s terms, you’ll be creating more debt in a shorter period of time.

HECS is meant to be a safety net to encourage education and Chapman had this to say  “Using the long-term bond rate will be regressive and it is very hard to argue this is fair.” We love seeing people stand up for what is right, especially people with some scope of influence and we want to say, Bruce Chapman, you are a boss.

The major problem with the proposed changes to HECS is that it impacts poorer students more harshly than others, outside modeling has found that the lowest 30 percent of income earners would end up having to repay $105,000 from a starting debt of $60,000. But on the other hand, the top 25 percent of income earners would only end up paying $75,000 from the same starting debt. The problem arises because the less you earn doesn’t mean you pay less interest and many people won’t be able to keep up with payments.

There have been suggestions to move across to the British system where interest is only charged once graduates are earning over a certain amount. Luckily it seems that the government may have listened, as there is talks of this program being the first major cut from the budget.

Bruce Chapman aka. The Boss summed it up best in May by saying “HECS should act as an insurance mechanism and that aspect of the scheme is being undermined.”

Here’s hoping that common sense prevails for once.