Higher Education Support Amendment (Fix HECS) Bill 2026

Dr RYAN (Kooyong) (10:22): I move: That this bill be now read a second time. We need to fix HECS. Millions of Australians have done the right thing.

They've studied hard at school and at university. They've got a degree. They're working, they're paying taxes, and yet they have HECS debts that they still can't pay off.

And now, they're struggling to fulfil their dreams—to buy a home, to live comfortably, to start a family of their own. Why is that? Because the government has created a cost-of-learning crisis.

Here's how. HECS debts and other student loans are indexed on 1 June every year. If your salary is more than $67,000, over the last twelve months your employer has withheld money from your salary to repay your HECS debts and student loans.

But those repayments weren't deducted from your HECS balance before indexation was applied on 1 June. So, this month, you were indexed on HECS that you have already repaid. You are being charged interest on a debt that you have already paid off.

It's no wonder that Australians can't get ahead. It's no wonder that graduates are watching their balances barely move despite years of repayments. The system isn't broken by accident—it's working exactly as it was designed.

It is imposing an unfair stealth tax on our graduates—one which will cost them over $3 billion in the next 10 years if we don't fix this inequity. This is structural unfairness which was deliberately baked into the legislation in the 1980s at a time when HECS fees were modest, when house prices were a fraction of what they are today, and at a time when the cost of living wasn't eroding the dreams of young Australians.

Times have changed. But the law has not. If a mortgage or credit card debt were structured in the same way as HECS debts, it would be illegal.

But when governments take advantage of a generation which is already locked out of homeownership, already crushed by rent, already stretched by the cost of groceries, fuel and electricity—apparently that's just fine. It doesn't need to be this way. This bill moves the annual indexation date of HECS from 1 June to 1 November.

That five-month shift would mean that both voluntary and compulsory repayments made during the financial year were credited to a person's HECS and student loan balance before indexation was applied. Graduates would pay indexation only on what they actually owe—not what they've already repaid. It's that simple.

And it is that fair. The Parliamentary Budget Office has costed this change. The verdict: it would save graduates $3 billion in HECS debts and other student loans.

Three billion dollars in a stealth tax that the government has been quietly collecting from people who are already struggling to save a deposit, already paying record rents, already choosing between their ambitions and their bank balance. And here's the part I want the government to hear: it would cost the budget only $374 million in its net headline cash impact over the forward estimates.

Because when graduates aren't being indexed on money that they've already repaid, they can pay down their principal faster. Under this legislation the Commonwealth would receive an additional $819 million in principal repayments over the forward estimates. So, we would achieve $3 billion in savings for graduates at a fraction of that cost to the budget.

It's an extraordinarily good deal for young Australians. Australians have taken on HECS debts because they've been told that education is an investment in their future. They've held up their end of the bargain.

They've studied, they've graduated, they've got jobs, they've started repaying their debt. But they're watching their debt regrow faster than their ability to clear it—because the system is designed to extract more from them than it should. A degree should be a pathway to opportunity.

It shouldn't be an anchor around your neck when you're already treading water. The National Union of Students, the universities and the higher education institutions are all clear: HECS is one of the single biggest financial pressures on Australians, and the system, as it is, is broken. HECS was introduced to help more Australians access tertiary education.

But over time it's become a massive net negative for this country. This bill fixes an important aspect of the intrinsic unfairness of the system as it now stands. It fixes it practically, it fixes it immediately, and it fixes it at a cost that the budget can easily absorb.

This is not a radical proposal. It's fair. It's costed.

It's simple. And it's long overdue. I commend this bill to the House.

The SPEAKER: Is the motion seconded?