Labor to wipe $3bn from Hecs and Help debts through indexation changes

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Measure to ensure student debts can’t outpace wage growth by retrospectively capping indexation rate for loans

Education minister Jason Clare says changing the way Hecs/Help loans are indexed is a recommendation of the Universities Accord final report.Education minister Jason Clare says changing the way Hecs/Help loans are indexed is a recommendation of the Universities Accord final report.The federal government will cut around $3bn in student debts through a key change to the Hecs and Help programs, reversing last year’s horror indexation hike and delivering a $1,200 saving for the average person.

The change, which requires legislation, would be retrospective and backdated to 1 June 2023, effectively turning back the clock on last year’s. The figure, which was the highest in more than a decade, caused many loans to grow faster than Australians could pay them off.About 3 million Australians hold student loans, at an average debt of $26,500, and the measure would cut about $1,200 from their outstanding Hecs/Help debt this year.

The accord called for other cost of living measures including a stipend for unpaid mandatory placements, scrapping the former federal government’s failed Job Ready Graduates Scheme and reducing student contribution amounts for low-income earners. Ryan told Guardian Australia the petition had “struck a nerve” in broader society, with many Australians prompted to log in online and check their student loans with an “unpleasant shock”.

 

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