Millions of Australians struck with higher HELP debt

Australians have received a 7.1 per cent increase on their outstanding HECS-HELP debt after the highest indexation rate in decades was applied on Thursday 1 June.

This increase was described as “crippling” and estimated to have affected three million former students.

While there is no interest charged on student loans, indexation is applied annually to reflect its current value by aligning it with the consumer price index.

This is the highest rate seen in 32 years, after an average indexation of 2.48 per cent over the last ten years.

The National Union of Students (NUS) claims the government will profit $2.5 billion from this increase, driving up the average HELP debt by $1,700.

Futurity Investment Group conducted a survey that revealed the average time to clear student debt is now approaching ten years.

Many young Australians now claim they will spend the rest of their lives in debt.

Group executive, Kate Hill, identified ongoing financial issues that young people will face.

She said, “Buying a first car, buying a home, starting a business — those sort of financial decisions that more often than not require borrowing for young people — just won’t be available because of the level of debt they will have sitting there because of their education.”

This generates more concerns that young Australians will be shut out of the housing market.

Shadow Minister for Education, Sarah Henderson, has criticised the federal government for failing to take action.

“After so many bad decisions and broken promises from this government, Education Minister Jason Clare is clearly tone deaf to the cost of living of crisis Australians are facing.”

“The Government should seriously examine what options can be taken to support young Australians pay down their debts, instead of denying it’s a problem.”

Senator Henderson has urged the Albanese Government to start delivering solutions.