'Students need this money now': Wagga CSU head on teased paid placement plan

Two big announcements from the federal government at the weekend will begin to affect Wagga students and those living with HECS debt from as early as next month - if they pass through parliament.

Education Minister Jason Clare on Sunday announced the government would cap the Higher Education Loan Program (HELP) indexation rate, eliminating about $3 billion of student debt - a move that directly impacting the three million Australians currently living with student debts.

A second relief measure announced will incorporate paid practical training for degrees that require mandatory placement - such as teaching and nursing degrees - which will help around 68,000 eligible higher education students and over 5000 VET students.

Tyla Cavallaro, a fourth-year student undertaking a Bachelor of K-12 Education at Wagga's Charles Sturt University (CSU), is excited about the prospect she and fellow students will be paid for their placements.

"Placement can be a really difficult time financially for students if we have to step away from our paid work," Ms Cavallaro said.

"With an education placement there is so much work that teachers have to do at home, there is so much outside of the school hours that people don't often see.

"Having that financial assistance, it can just take away the stress of not being able to afford the cost of living."

She was also keen to hear about the government's proposed changes to how student loans are indexed, saying that it's a "lot more relieving" to hear about the new reforms.

"Watching [my HECS debt] creep up every now and then ... seeing those extra charges making it jump up so drastically was definitely a bit of a shock," Ms Cavallaro said.

"But seeing that that's not happening now, seeing the change... I think it's making it a lot more, in a way, motivating to study at university."

CSU Vice Chancellor Professor Renee Leon welcomed the paid placements announcement, noting it was recommended in the Australian Universities Accord final report.

Unlike the indexation reforms, students will have to wait a while before paid practical placements become a normality, the reforms will first be means tested before becoming available to students from July 1 next year, something Professor Leon says is disheartening.

"In 2023, Charles Sturt had more than 16,000 student placements, totalling more than 1.9 million hours, many of which must be completed away from their hometowns," she said.

"We are anticipating similar figures in 2024 and argue strongly that these students need to receive these payments to support them to continue their studies.

"Students need this money now."

Last year, indexation ballooned to 7.1 per cent in accordance with the Consumer Price Index (CPI), adding more than $1800 to the average student debt of $26,500.

The reforms will now index a student loan as per whichever is lower of the CPI or the Wage Price Index (WPI), which means that student debts will never outpace wage growth.

These reforms will also be backdated to affect last year's HECS debts, meaning a student's loan that was indexed using the 2023 CPI of 7.1 per cent would now be indexed by the 2023 WPI, which sat at 3.2 per cent.

If passed, an individual with an average HELP debt of $26,500 will see around $1200 wiped from their outstanding HELP loans this year, the Independent Tertiary Education Council Australia said.

Timothy Hofstee, who moved from South Africa to study agricultural science at CSU last year, was initially excited to hear about the government's new indexation reforms at first, but quickly became a sceptic.

"It sounded positive and encouraging, encouraging as in you wanting to continue on with your degree," Mr Hofstee said.

"But Australia's wages have been fairly stagnant for a long period of time

"Having worked it out already, it would take me about six years to pay off my debts if I work full time after uni."

Daniel Smith from Bush and Campbell Accountants has had clients ask for support and guidance regarding their student loans, particularly when the indexation rate was so high last year.

But he thinks the government using two different rates to index loans is ultimately a good thing.

"Bringing in the second option is going to help make sure those balances don't dramatically continue to increase," Mr Smith said.

"You're only ever going to pay your HECS debt off, generally, based off your income unless you choose to repay early.

"We can look at what their balances are with them and work out, based off your income, when's the HECS debt going to be paid off."

While believing applying these reforms to student loans is also a step in the right direction, Mr Smith said he feels for those who paid off their debts before they got hit with the 7.1 per cent indexation rate last year.

"Definitely a positive in that they're going to give people credits... it's only going to reduce their balances if it all goes through," he said.

"[However] there were probably people that did pay it out early that may not have paid it out early, if they knew what the lower rate was."

Ms Cavallaro needs to undertake 12 weeks of professional placement as part of her degree, meaning she needs to step away from her part time job for three months, risking her regular income.

"I'll have to take six weeks of leave... at the moment I'm working in a high school and I have an upcoming final primary placement, so I'll have to take leave from work to go and do that because I obviously can't complete it at my work," she said.

The Commonwealth Prac Payment will provide eligible students a weekly payment of $319.50 while they undergo their mandatory periods of professional and clinical training.

The Galore branch of the Country Women's Association was set to bring a motion forward during the annual CWA meeting at Coffs Harbour this week, calling for paid practical placement to address the shortage of nurses in the regions, something that seems to now be becoming a real prospect.