Adam Bandt blasted after claims interest rate rises will force Aussie students to pay $2.7billion

Greens Leader Adam Bandt was blasted after wrongly claiming Australian students will be forced to pay billions in interest on their loans following recent interest rate rises. 

Mr Bandt warned students on Monday that they will owe an additional $2.7billion in interest this year on their HECS-HELP loan.   

‘If you’ve got a student loan, these interest rate rises will hit you too,’ Mr Bandt wrote on Twitter. 

‘Uni students are going to get hit with $2.7billion in interest this year.’ 

Greens Leader Adam Bandt (pictured) has faced backlash after confusing Australia’s student loan system with the United States

Social media users slammed the politician for confusing Australia’s student loan system with the one used in the United States and criticised the Greens leader for not understanding how student loan repayments work. 

‘We don’t have student loans here in Australia, we have HECS which doesn’t accrue interest,’ one person wrote. 

‘We have HECS/HELP you imbecile … you should know this,’ another user wrote.

‘Basic stuff Adam. There is no interest on HECS. It’s indexed to inflation,’ a third chimed.  

Another user commented: ‘Slightly embarrassing that the leader of a major Australian political party doesn’t even know the very basics of the policy he’s criticising.’

‘HECS/HELP loans have a 0% real interest rate, and in fact higher rates lower nominal interest on student debt by lowering inflation.’

In a social media post shared on Twitter (pictured), the Greens leader claimed interest rate rises would directly impact student debt and labelled the government loan scheme ‘unsustainable’ 

In Australia, HECS-HELP is a government scheme that pays a student’s tuition fees while they complete their degree. 

Repayments are deducted automatically by the government when a graduate earns over $47,014 a year – and is scaled depending on an individual’s salary.  

HECS-HELP debt does not accumulate interest and is adjusted yearly by the Australian Taxation Office based on the Consumer Price Index.

But the Greens leader claims his remarks are justified as the Consumer Price Index is influenced by interest rate rises. 

‘They [comments] are incorrect,’ Spokesperson for Adam Bandt told Daily Mail Australia.

‘Interest rates are a key driver of the consumer price index, by which the HECS/HELP system is indexed.

‘As rates increase, so does the CPI, meaning students will have their debts increase.’

On June 1, almost three million Australians with an outstanding student debt were hit with a 3.9 per cent repayment increase – 0.6 per cent more than last year’s rate.

The repayment increase means students with an average debt of $23,685 owed an additional $920. 

Mr Bandt ended his Twitter post urging the government to rid Australians of their ‘unsustainable’ student debts. 

‘This isn’t sustainable. The Government needs to wipe student debt,’ Mr Bandt wrote. 

In 2021, 2.9million Australians had an outstanding HECS-HELP debt totalling $68.7billion – $2.3billion higher than the previous year (pictured, students on graduation day at the University of Sydney)

The Greens leader has promised to abolish student debts and vowed to make university and TAFE free if his party gained the balance of power following the Federal election in May. 

According to the Australian Taxation Office, there were 2.9million people with an outstanding HECS-HELP debt totalling $68.7billion in 2021 – $2.3billion higher than 2020.