Millions relieved from student loan burden as debt cuts roll out ahead of Christmas
Australians with outstanding student loans will soon see their balances reduced, as the Labor government’s HECS-HELP debt relief began rolling in on Wednesday.
A total of $3 billion in student debt has been wiped, benefiting three million Australians ahead of the Christmas season— for some, the relief amounts to thousands of dollars.
For example, someone with an average HELP debt of around $27,000 will have roughly $1200 shaved off their loan.
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The reform, backdated to June 2023, will also refund former students who repaid their student debt in 2023 or 2024.
The legislation, passed in late November, aims to address last year’s spike in the indexation rate of 7.1 per cent.
After inflation surged last year, the HECS indexation rate skyrocketed to 7.1 per cent, triggering an uproar as students saw their debts spiral.
While the HECS indexation was previously based on the Consumer Price Index (CPI), The Universities Accord Bill 2024 now caps the HECS indexation rate to the lower of either the CPI or the Wage Price Index (WPI).
In addition, Labor has pledged to cut HECS debt by a further 20 per cent, wiping out $16 billion in HELP and other student loans—but only if they win the next federal election.
Originally published on 7NEWS
