HECS debt is about to get bigger again

All you need to know about HECS

The federal government has announced that it will be increasing the indexation rate for HECS-HELP and FEE-HELP debts from 3.9 per cent to 7.8 per cent from 1 June 2023. This means that the amount of money you owe will increase by 7.8 per cent each year, rather than the current 3.9 per cent.

The government said it would backdate the change - which formed part of the May federal budget - to student loans issued from 1 June 2023.

The measure will also be backdated to 2023, meaning the 71% increase will be replaced with a much lower increase.

The government said the change was necessary to ensure that the HECS-HELP and FEE-HELP schemes remain sustainable in the long term.

The indexation rate for HECS-HELP and FEE-HELP debts is set each year by the government, and is based on the Consumer Price Index (CPI). The CPI is a measure of the average change in the prices of goods and services over time.

The government has said that the increase in the indexation rate is necessary to ensure that the HECS-HELP and FEE-HELP schemes remain sustainable in the long term. The government has also said that the increase will not affect the repayment thresholds for HECS-HELP and FEE-HELP debts.