It's Confirmed - Your HECS Debt is Increasing by 7.1% in June

Indexation is behind all this - but what is it?

If you’re thinking about going to uni or are a current student or uni graduate… you’re going to want to sit down for this.

The Australian Tax Office has confirmed that there will be a 7.1% increase to student loans on 1 June.

That’s an extra $1759 for people with an average student debt of $24,770, according to The Guardian.

We’re not okay.

If you’re still trying to wrap your head around how HECS-HELP actually works in general, we’ve broken it down for you in a handy guide.

Last year, we reported that the indexation rate was jumping up in 2022 to 3.9%, so the announcement of this year’s indexation is even more of a nightmare.

What the heck is indexation though?

Indexation is applied to your debt to “maintain its real value by adjusting it in line with changes in the cost of living”, according to Study Assist.

So while there’s no interest charged on HELP (HECS), indexation is added to your debts on June 1 every year once the HELP debt is 11 months old.

We’re all feeling the effects with cost of living RN, so while it’s no surprise our student debts have taken a massive hit, it still sucks nonetheless.

Study Assist reports that the compulsory repayment threshold for the 2022-23 income year will be $48,361.

The Daily Aus asked their followers about the news, how often they check their HECS debt, if they’ve repaid early, and their thoughts on indexation.

“I’m never going to get out of debt! We are being punished for trying to get a degree to contribute to society,” one user wrote.

Another user said, “Nothing prepares you to be completed blindsided by the government as an adult. There was so much misinformation/ lack of transparency about student loans and now it’s all coming out and we can’t do anything about it. So disappointing and honestly depressing.. 😔”

This year’s 7.1% increase is reported by The Daily Aus as “the largest [indexation] increase in decades”.

According to The Guardian, more than 3 million Aussies “owe in excess of $74bn in student debt”, and the time it’ll take for graduates to fully pay off their debt is now currently sitting at a decade.