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The government’s student debt reduction initiative is set to fail students who will still be required to pay student loan tax, according to the Independent Tertiary Education Council Australia.
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ITECA pushes for tax changes to student loans
14 November 2024
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The Independent Tertiary Education Council Australia (ITECA) cautioned that university students are set to still suffer under the 20 per cent student tax loan despite the student debt reduction initiative.
According to ITECA, the government's proposed reduction on existing debts would reduce the balance of all existing students, but would still cost taxpayers $16 billion.
The reduction would benefit around 3 million Australians across VET and HELP loans and would reduce the balance of student debts by at least one-fifth.
However, the reduction in debt would be contradicted by the continuation of student loan tax, according to ITECA.
It was noted the government’s decision not to revise the 20 per cent student tax loan along with the debt reduction was a “missed opportunity” to support education and training choices made by students.
ITECA chief executive Troy Williams said the 20 per cent student loan tax was government-levied for students in courses not subsidised by independent registered training organisations.
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“While this initiative will provide debt relief, with a greater focus on students in high-debt fields such as law, dentistry and medicine, it fails to address the core issues facing future students studying with many independent skills training and higher education providers, this being that they will continue to pay the 20 per cent student loan tax,” Williams said.
“For most current and future students with independent tertiary education providers, their debts will continue to be higher than they need to be as the 20 per cent student loan tax remains in place.”
ITECA argued the student loan tax insulted students who had to borrow money to undertake money, based on their inability to access government-funded locations to study.
Williams noted that the 20 per cent rate at which students were taxed was the most “egregious” aspect of Australia’s loan system and would continue to burden students.
“The Australian government’s announcement regarding the one-fifth reduction in current student debts fails students,” Williams said.
“It’s regrettable that with the recent Australian government announcement on student loan debts, no action was taken to remove the 20 per cent student loan tax.”
ITECA said it would continue to advocate for student loan reform by supporting the removal of the student loan tax to ensure a fair and equitable student loan system for all Australians.
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