Millions of Australians face a 7.1% increase in their Help and Hecs loans from 1 June, the highest rise in decades, prompting calls for urgent reform amid the cost-of-living crisis. The indexation is based on the March quarter CPI of 7%, down from December's 32-year high of 7.8% but up from 5.1% a year ago.
An average student debt of $24,770.75 will rise by $1,758.72, while over half a million people with $40,000 debts will see an extra $2,840. Independent MP Zoe Daniel urged the government to reform the system, saying Help is 'not fit for purpose' and disproportionately affects women, exacerbating the gender pay gap.
The Greens senator Mehreen Faruqi called for a pause on indexation for at least two years, warning of a 'student debt avalanche' for essential workers like nurses and teachers. A Senate committee earlier recommended against abolishing indexation, citing unclear benefits and budget concerns.
Daniel proposed basing indexation on the wage price index, as in the UK, or using the Reserve Bank's trimmed mean inflation rate. The National Union of Students and the National Tertiary Education Union backed calls for a higher repayment threshold and abolition of indexation, describing the situation as 'financial quicksand'.
Education Minister Jason Clare acknowledged affordability as a 'real issue' and said the Universities Accord team is examining student debt. Outstanding Help debt rose to $74.3bn in 2021-22, up from $68.7bn the previous year.
