The Albanese government continues to shirk action on the worst remnant of the Morrison-era changes to higher education.

By continuing to ignore the urgent need to undo the Job-Ready Graduates scheme, the government is retaining a policy that harms the financial security and living standards of millions of young Australians. 

Some 2.9 million Australians carry, on average, more than $27,000 in HECS debts.

Student contributions for courses like commerce and law are nine times higher than they were in 1989, a time when many members of this parliament graduated.

Australians are graduating with $50,000 in HECS debts from conventional three-year bachelor degrees – $80,000 after postgraduate studies – and taking a decade or more to pay them off.

Graduate salaries have increased by about 2½ times since 1996 – in that time, student contributions have increased six-fold.

How did it get this bad? The simple answer is, fees have increased over time as the threshold for repayment has decreased.

In 2021, the Morrison government turbocharged student debt when it introduced the Job-Ready Graduates scheme, doubling the cost of our most popular degrees, like humanities, business, law, communications and social sciences.

HECS loans are interest-free, but indexed annually on June 1 using a CPI-based formula to ensure they maintain their real value over time.

In 2023 and 2024, high inflation meant the total owed by Australian graduates increased from $67 billion to $81 billion. And the tax office collects HECS payments throughout the year but doesn’t adjust the balance owing until tax returns are filed – after indexation is applied. This often results in growing debt despite ongoing contributions.

The unfairness of the government’s policy settings was documented by the Universities Accord report in 2024.

It has been acknowledged repeatedly by the Albanese government, as it reduced indexation and increased repayment thresholds, then applied a 20 per cent discount to HECS debts after the 2025 election.

I was happy to support those measures, which decrease the burden of HECS on graduates – but they effectively only reduce debt to pre-Covid levels. These changes don’t help young people currently at university. And they don’t address the worst inequity in the system.  

Professor Bruce Chapman, the architect of HECS, has said on many occasions that the Job-Ready Graduates scheme is the “No.1 issue” with our HECS system.

The Universities Accord report found it needed “urgent remediation”. The government has conceded this too.

In 2023, Education Minister Jason Clare said the JRG “needs to be redesigned before it causes long-term and entrenched damage to Australian higher education”.

Three years later Job-Ready Graduates is still in place and our students face more debt than ever before.  

Increasing student debt is a drag on the lives of graduates – contributing to our record low birth rate, and the 20 per cent fall in rates of home ownership in 2035-year-old Australians over the past 30 years.

Young adults struggling with the increasing cost of rent and groceries are unable to buy homes and start families. In a country with an ageing population and decreasing tax base, this is a demographic time bomb. 

Reducing maximum student contributions could be achieved with a straightforward legislative amendment to existing legislation under the Higher Education Support Act 2003 – but the government has not put that on the table in Canberra this week. 

Instead, this week parliament will debate legislation for a new Australian Tertiary Education Commission, an independent body intended to bring stability, coherence, and long-term planning and stewardship to the sector.

While I welcome the commission – a key recommendation of the Universities Accord – the bill fails to signal any commitment to the Accord’s other signature recommendation: Urgent remediation of punitive student fees.

The legislation fails to empower the new ATEC to consider or provide independent advice on student fees. 

In real terms, students are taking on more debt to attend university in 2026 than any point in Australia’s history. And they’re doing so amid a cost-of living crisis, soon to be exacerbated by higher interest rates that push up rents and property prices.

HECS debts are affecting borrowing capacity at a time when the housing market is already inaccessible.

Against this backdrop, it is hard not to worry about the kind of future that awaits our children if the cost of tertiary education continues to climb faster than wages and the capacity for young Australians to pay debt down.

The ATEC may help the tertiary education sector plan for tomorrow – but that will mean little if we refuse to fix the costs students face today. Minister Clare has repeatedly said that JRG should go. He should see to that this week. 

Dr Monique Ryan is the independent MP for the federal seat of Kooyong