HECS debts will increase by 2.8% tomorrow, 1 June.
Each year, the Government indexes student loans so they reflect the current value of money.
It is the lowest rate of indexation since 2021.
About HECS
When you begin a university course, you can either pay upfront or apply for a Higher Education Contribution Scheme loan (HECS) under the Higher Education Loan Program (HELP). Most students apply for this loan.
The system, rolled out in 1989, requires students to make payments on their loan depending on their income. From 1974 to 1989, degrees were free.
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The repayment threshold is currently $67,000, meaning if you earn above that amount on a yearly basis, you will start paying off your debt.
Indexation
Student loans increase every year through ‘indexation’, reflecting changes in the value of money over time.
In 2024, the Government passed a law which means it calculates HECS indexation based on either the rate of inflation or of wage growth, whichever is lower.
This year, HECS debts will increase by 2.8%. It is the lowest indexation since 2021.
A $30,000 HECS debt will increase to $30,840.
