The Grim Reaper pursues HECS debts

Christopher Pyne suggests collecting HECS debts from dead students as way to help budget.

“[If] an elderly person passes away with a HECS debt, they wouldn’t be able to say to the bank, we’re not paying back our mortgage, yet they are at the moment entitled to not pay back their HECS debt,” Mr Pyne said.

Education Minister Christopher Pyne pursues a HECS debt

Education Minister Christopher Pyne pursues a HECS debt

Actually, Christopher there is a difference. If someone inherits a house with a mortgage, the house is worth the market value minus the mortgage. It’s appropriate that someone who inherits a capital asset should only inherit the unencumbered value.

With a HECS debt, the beneficiary does not receive any tangible benefit from which the debt can be deducted. In addition, the education received has no capital or tangible value once a person has died. The value that was created has disappeared with the death of the now deceased student.

It may be appropriate for the Federal Government to pursue the estates of deceased students for HECS debts but Mr Pyne’s comparing this to recouping mortgages on houses is disingenuous.

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