Yahoo Finance HECS changes on the cards for millions as Anthony Albanese says 'we need to do better'
The prime minister has hinted his government could soon provide student loan relief for millions of Aussies.
Australians struggling with HECS debt could soon be thrown a lifeline from the federal government. Early forecasts indicate student loan debt indexation will increase by 4.2 to 4.8 per cent in June, which would add hundreds of dollars onto peoples' repayments.
Teal MP Dr Monique Ryan, who has been campaigning for changes to be made to HECS indexation, told Yahoo Finance there are too many Aussies delaying going to university, starting a family or buying a home because of student debt. Her petition has reached more than 263,000 signatures and she said it reflects how many people are "deeply distressed about this issue".
"The reality is that half of the people who get a HECS debt now carry it into their 40s and the unintended consequence of that is that it's actually affecting much of [peoples'] decision making," she said.
Are you struggling with HECS debt? Email stew.perrie@yahooinc.com
But Anthony Albanese has hinted there could be some help coming in the federal budget.
"I think there's a range of areas where we need to do much better with the younger generation, and HECS is one of them," the prime minister revealed on radio station HIT Central Queensland.
"We've received a review of that... and what that has said is that the system can be made simpler and be made fairer.
"The idea of HECS is a good one. It's one that has led to a massive expansion, the number of people being able to do university degrees.
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"But we're examining the recommendations and we'll be making announcements pretty soon on that. We, of course, have a budget coming up."
How does HECS indexation work?
HECS indexation is currently tied to the consumer price index (CPI), which is one of the most well-known indicators of inflation.
Aussies were dealt a brutal blow last year when HECS indexation went up 7.1 per cent, which was the highest jump in a decade. It jumped 3.9 per cent the year before that.
The average HECS debt at the moment is $26,494, according to Parliamentary Library figures, and if indexation goes up by the forecasted 4.8 per cent, then that will add $1,272 to that loan debt.
The review Albanese was referring to was the Australian Universities Accord, which was handed down in February. It called for indexation to be tied to whichever is lower out of inflation or the wage price index.
Calls for HECS indexation to be 'abolished'
However, some are calling for indexation to be scrapped altogether.
“Just talking about the cost-of-living crisis while ignoring the heavy burden of student debt is not going to ease the pain for anyone,” Greens education spokeswoman Mehreen Faruqi said.
“University and TAFE should be free and all student debt wiped, but let’s start with abolishing indexation and providing some relief to people being weighed down by an ever ballooning debt.”
Aussies burdened with HECS debt feel like every time they make a payment, the indexation takes it straight back to the same place, or makes it even higher.
"I'm struggling to make ends meet and pay off my HECS debt," single mum of two Angela told Yahoo Finance. "I'm not even working in the fields I used this HECS debt for. It seems every year I am paying it off it then goes up due to the indexation."
Abbey O'Hagan graduated in 2021 and feels the debt she took on when she was young will never be fully paid off.
"Unless you win the lotto, or maybe come from a wealthy family, it feels impossible for me, or the other young Aussies I speak with, to escape that horror that is the student debt looming over our heads," she wrote for Yahoo Finance.
"I spent thousands of dollars last year with the pay-as-you-go (PAYG) option, which meant a large chunk of my wage vanished fortnightly. But when I checked my balance again after the massive indexation increase, I owed $800 more than last year.
"I paid thousands to merely tread water."
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