- Millions of Australians will receive a $1,200 boost
- College students with HECS/HELP debt will benefit
Millions of university students across Australia will save $1,200 on their debt payments thanks to measures to reduce the cost of living.
The federal government announced the changes on Sunday, which will reduce the indexation of the Higher Education Contribution Scheme (HECS) and the Higher Education Loan Scheme (HELPS).
The cost savings will be announced in the budget on Tuesday, after being presented to parliament, and will help more than three million people reduce the cost of their loan repayments.
Millions of students, including apprentices and apprentices (pictured), will see their student debt reduced after the government announced the indexation rate will be reduced.
The move could mean up to $3 billion in student debt would be eliminated, helping college students, trainees and trainees pay off their debt.
On average, the amount of money students owe the ATO will reduce their HECS and HELP debt by $1,200.
The change will apply to all HELP accounts, VET student loans, Australian Learning Support Loans and other student support loan accounts that existed on June 1 last year.
Indexing fees are added to the loans students take out to pay for their higher education.
The rate is added to a HECS or HELP debt to take into account changes in the price of goods and services, which is measured in Australia by the consumer price index.
Federal Education Minister Jason Clare said the government will change the way student loan indexation is calculated.
The government announced the changes on Sunday, and the cost savings will be carried forward into this month’s budget (pictured Premier Anthony Albanese, left, and Education Minister Jason Clare, right).
The move will mean the amount of debt students (pictured) have to pay to the ATO will be reduced, helping them save an average of $1,200 on their HECS and HELP debt.
‘The Universities Agreement recommended indexing HELP loans to the lower of the CPI and WPI. “We are doing this and we are going further,” he said. Newscorp.
The government also rolled back the change to June 1 last year, meaning all student debts that were indexed in 2023 will also be reduced.
The move was recommended by the University Agreement which was created to conduct a review of the higher education system in Australia.
The indexation rate this year, which is 4.75 percent, will be reduced to 4 percent and the combined savings will take $1,200 from an average HELP loan of $26,500.
‘We will roll this reform back to last year. “This will erase what happened last year and ensure it doesn’t happen again,” Mr Clare said.
Students with larger debts, such as those with HELP debt of $50,000, will see their debt rate reduced by $2,245.
Skills and Training Minister Brendan O’Connor said by backdating this reform to last year, the government was ensuring last year’s indexation jump would receive cost-of-living relief.
“This continues our work to alleviate cost of living pressures and reduce and remove financial barriers to education and training,” he said.
The indexation rate hit a whopping 7.1 percent last year, while inflation hit an annual rate of 7 percent during the first three months of 2023.
Students owed $78 billion in HECS and HELP debt last year, increasing by $4 billion on the previous year.
More to come
