HECS indexation overhaul in budget, $3 billion in student debt wiped
Government to cut 3bn in student debts, Hecs and Help
Indexation rate on student loans to be capped
The federal government will overhaul the HECS indexation system in the upcoming budget, wiping out $3 billion in student debt and capping the indexation rate on student loans, including HECS, VET and Australian Apprenticeship loans.
The indexation rate, which is currently set at 7.1 per cent, will be capped at 3.9 per cent from 2024, providing relief to millions of Australians who have been struggling with rising student debt.
The government's decision comes after a horror year for student debt, with the indexation rate of 7.1 per cent seeing HECS debts increase by a significant amount. In the past year, Australians paid a record $29 billion in voluntary HECS-HELP repayments, according to ATO data.
The government estimates that the changes will eliminate $3 billion in HECS debt and reduce the indexation rate on student loans by approximately 48 per cent from June 2023.
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