Student Debt Relief Is Bad?

 

A lot of older Australians online complain that young people are having their HECS* debt cancelled. But many of these same older people have profited greatly off the young with massively artificially inflated house prices.

No amount of HECS debt being cancelled will come even close to the society wide tax that inflated house prices have put on the shoulders of the young, and inflation is a tax in effect and many of you have gleefully collected it.

Prime Minister Anthony Albanese has cut 20% of HECS debt. But even if all of it were cut, and university was free (to the user) again like it was when many of these older people were growing up, still this would not even come close to the burden on young people that paying for the retirement of the elderly is, through both housing prices and taxes to pay for generous welfare.

The housing market will likely crash before these young people are ready to retire**. But before that happens most older Australians will have cashed in their homes, to live large in the final stages of life. Young people will have in turn purchased them at inflated prices and likely won't see the continued house price growth we have seen over the last 30 to 40 years, because no bubble lasts forever. New Zealand's similar housing bubble has burst, Australia's bubble will have its day too.

So, if you have profited off the immoral heights housing prices have reached, don't begrudge the young getting some of their own back. And also remember that you will be eligible for a pension that no younger Australians will get, and far more is spent on the pension each year than on HECS debts. Indebting and greatly taxing the young to profit the retiring generation is bankrupting this country. Student debt doesn't even begin to come close to that.

 * For foreigners readings HECS debt is the Australian version of student debt. 

** I say likely, because we cannot know for sure, and it really should have crashed by now. It seems way more resilient to over-pricing that anyone ever expected. Still, no bubble lasts forever.