Students may soon be able to pay off HELP debt by dipping into super
Many Aussie students use the Government's Higher Education Loan Program (HELP) to pay for their studies, and now there are calls for super to be used to pay off the debt, ABC reported.
Around $30 billion dollars was granted to students through HELP loans last year, and next year, that number is expected to top $50 billion. With growth like this forecasted for the popular scheme, there have been calls for Treasurer Scott Morrison to introduce a payment plan allowing graduates to use their super to get rid of study debt.
The plan would target graduates in their twenties and thirties, ABC reported Liberal senator Chris Back as saying. It would allow graduates - some of which have young families or mortgages to consider - to take the pressure off by getting rid of looming study debt.
"At a time when they really do have a high liability… they've got this HELP debt sitting over them," Back said.
Graduates who used super to pay off their HELP loan would then be required to replenish their super later in their careers, so their retirement would not suffer.
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According to the ABC, if implemented in this year’s budget, the idea also represents significant budget savings - potentially more than $500 million over the forward estimates.
Although the plan has not yet come before the Government’s expenditure review committee, a backbench committee has already approved it. Back said he was hopeful it would appear in this year's budget, but if not, he is “very very hopeful it will find its way into our policies going forward into 2016 election."
This is not the first time a payment plan involving dipping into super has been proposed. In 2014, South Australian senator Nick Xenophon suggested first home buyers should have access to super funds for their deposit.