All Australians with HECS-HELP student loans will cop a 7.1 per cent indexation on what they are owing due to inflation
The average national student debt is $24,770.75 and will be increased by an extra $1758.72.
This change has significantly affected over three million Australians with outstanding student loans.
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On today’s episode of The Briefing, we talk to the creator of the HECS-HELP system Bryce Chapman about whether he thinks the current system should remain as is and former student Hanna who is furious at the increase.
Hanna has outstanding student debts of $54,000 and has been working and paid off $10,000. However, with the change of the latest indexation, the amount has increased to where it all started ten years ago.
I’m feeling very powerless, to be quite honest. I’m feeling really frustrated. I feel like we’re already dealing with a lot of financial stress with the increasing cost of living,”
Hanna said,
This is just another way that people who have dedicated themselves to education, trying to make a meaningful contribution to the country and the economy, are really just being put in another stressful financial position,”
she added.
Chapman says the indexation has been applied every year on June 1 to student debts, and it has always been the way since the health system first came back in 1989.
Unlike other types of loans, HECS-HELP debts remain interest-free; they are subject to indexing in line with inflation to ensure people reply to the actual value of the loan to the federal government.
Chapman says community students are financially vulnerable in the short run but not in the long run.
Personally, a graduate with a degree will earn about $1.8 million on average over the lifetime. Then someone without a degree, so they’re not a disadvantaged group,”
Chapman said.
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