A young woman has criticised her mounting HECS debt and fears she may never be able to repay it due to indexation.
Alicia, a 28-year-old high school teacher and content creator from Sydney, doesn’t think she’ll ever be able to fully repay her loan after studying a double Bachelor of Science degree, a Bachelor of Urban and Environmental Planning and a Master of Teaching.
After finishing her higher education, Alicia was left with a debt of $70,000.
However, because of indexation, which adjusts the amount students owe according to inflation and wages, Alice now owes $81,000 despite making regular payments.
The 28-year-old is glad she went to university because it has provided her with a comfortable job that she is passionate about, but she wishes she had known her HECS debt could increase.
“I started college when I was 17, I didn’t know all the information I know now,” she said. news.com.au.
‘I didn’t know what indexing was and to be honest I’m still a little confused about how it works.
‘When we entered university they told us: ‘this is the cost of the degree or the cost per semester’ and that was it.
Sydney high school teacher and content creator Alicia (pictured) admitted she thinks it’s “futile” to try and pay off her HECS debt in full
Alicia accumulated $70,000 of HECS debt after studying a double Bachelor of Science degree, a Bachelor of Urban and Environmental Planning and a Master of Teaching degree.
“None of us knew what indexation was or that it was part of our HECS. How could it go from 0.6 per cent to 7.4 per cent?”
Alicia only realized her debt had increased by $11,000 when she completed her tax return for the 2023-2024 tax year.
She described HECS as a “broken system that continues to punish young people” who are “pressured to go to university”, noting that it seems “pointless” to try to pay for it.
“What happens if I decide to start a family and take maternity leave, and then the payments stop again and keep increasing?” she asked.
‘At this rate, with indexation, who knows how much our HECS debts could actually cost us and whether we will ever be able to pay them off.’
Alicia added that the debt will likely affect her chances of being approved for a mortgage loan and is already taking a huge toll on her finances with $500 deducted from her salary every two weeks.
The young teacher has been open with Your online audience when discussing the reality of their college debt.
Surprisingly, many commentators claim they are also struggling to repay their HECS.
“Mine has over 100,000 miles on it already and I can’t breathe thinking about it,” wrote one.
“Life seems like a scam at this point,” said another.
“Mine was indexed and hit 95,000. I just agreed that I will pay the index for the rest of my life,” wrote another.
“Mine was $30,000 and now it’s somehow $61,000! I know they went up but come on! I’m pretending it doesn’t exist,” one said.
Alicia (pictured) said she knew nothing about indexation when she applied for a HECS loan aged 17 and now faces paying an extra $11,000 due to the system.
Data from comparison website Finder shows the average HECS debt is $40,000, with 21 per cent owing between $40,000 and $100,000 and just over one per cent owing more than $100,000.
Those with debt are also increasingly concerned about how much they owe: 63 percent are slightly or extremely concerned about their ability to pay it back, up from 54 percent last year.
However, 12 percent do not believe they will ever be able to repay the debt in full.
Money expert Richard Whiten told the outlet that those trying to pay off HECS on top of other debts should focus on prioritising their loans.
He described HECS as a “flexible” repayment system and instead ordered young Australians to pay off their highest-interest debts first.