It’s axiomatic that a better educated community makes for a fairer, more productive, more prosperous nation.

But Australia has a cost-of-learning crisis, just as much as we have a cost-of-living crisis. And it’s all our governments’ work.

Millions of Australians have done the right thing – studying hard at school and university, getting a degree, working and paying taxes.

But they have HECS debts they cannot pay off, so they’re struggling to fulfil their dreams to have a family of their own, buy a home and live in reasonable comfort.

Here’s the problem.

HECS debts and other student loans are indexed on June 1 every year. If your salary was more than $67,000 in the past 12 months, your employer has withheld money from your salary to repay your HECS debts and student loans.

However, those repayments were not deducted from your HECS balance before indexation was calculated and added by the Australian Tax Office last month.

In other words, graduates’ debts are calculated on HECS liabilities they have already paid. They’re being charged interest on a debt they have already paid down.

That anomaly was recently costed for me by the Parliamentary Budget Office as costing graduates $3.2 billion over the next 10 years – $3.2 billion that could be put towards paying down their principal and freeing themselves from HECS and other student loan debts.

The impact of indexation, fee increases and changes to system settings mean that almost two-thirds of current humanities students will hold debts exceeding $50,000, and one in four will carry that debt into their late 40s.

Recent changes reduce early-career annual repayments, which will slow debt clearance further through lower amounts repaid and more years of compounding indexation. This will particularly affect women because of the career breaks associated with parenting,

Graduates despair, and looking at the mountain of debt they confront, some school leavers are declining to enrol in tertiary education. Who can blame them?

Indexation is a structural unfairness baked into the system decades ago when HECS fees were modest, house prices a fraction in real terms of what they are today, and the cost of living less front of mind.

Times have changed, but the system has not.

If mortgages or credit card debt were structured like HECS, it would be illegal.

The good news is that this anomaly can be fixed.

Earlier this week, I presented a private member’s bill to move the annual HECS indexation date from June 1 to November 1.

That 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 on money they have already repaid.

It is simple, it is fair, and it would not put significant strain on the federal budget.

According to modelling I commissioned from the Parliamentary Budget Office, it would take just $374 million off the bottom line over the forward estimates.

This is because, when graduates are not being indexed on money they have already repaid, they pay down the principal faster.

According to the PBO modelling, the Commonwealth would receive an additional $819 million in repayments over the forward estimates.

It’s a good deal for young Australians and a relatively low-cost option for the government.

Education Minister Jason Clare knows he has a HECS problem. He knows it is inequitable, an unfair burden on young graduates, and discouraging for school leavers considering tertiary education – even as we confront skill shortages across the workforce.

The government acknowledged that with its populist (but popular) move to cut HECS and other student loan debt by 20 per cent last year.

But that was a one-off change, which did nothing for students starting university in 2026 and beyond. And as inflation rises at higher levels than we’ve seen in decades, the increases in HECS debt resume their relentless march.

With the new Australian Tertiary Education Commission still finding its feet, it seems unlikely that HECS debts will be swiftly restructured, despite appeals from universities, higher education institutions and, most importantly, from students and graduates.

One solution is simple and there for the government right now.

My private member’s bill is fair, it’s costed, it’s simple, and it’s long overdue.

As recently as last week, Anthony Albanese spoke of his government’s goal “to build an economy that works for people, not the other way around”.

“One that upholds our national values of fairness, opportunity and aspiration for all,” he said.

When it comes to HECS, we should look closely at what he does, not at what he says.

Dr Monique Ryan is the federal independent member for Kooyong