If you’re one of the millions of Australian university students and graduates, you’re in for a sweet Christmas treat.
The Albanese government has just refunded a whopping $3 billion of student debt, just in time for the holiday season!
The Average HELP Debt Just Got a Whole Lot Smaller
So, how much are we talking? The average HELP (formerly HECS) debt has been slashed by a massive $1,200, thanks to changes to the rate of indexation by the government. That’s a nice chunk of change to put towards those pesky student loans.
What’s Behind the Change?
The government made the move to stop indexation from outpacing wages. To do this, they changed the indexation rate to the lower of either the Consumer Price Index (CPI) or Wage Price Index (WPI). As a result, the indexation rate for 2022-23 went down by 3.9 per cent, and by 0.7 per cent for 2023-24. That means those with student debts get a nice credit to their account.
Refunds for Those Who’ve Paid Off Their Debts
If you’ve paid off your student debt since 2023, you’ll receive a refund from the government. Yes, you read that right – a refund!
A Gift for Christmas, and a Promise for the Future
“We’ve wiped the average HECS debt by $1,200. And just in time for Christmas,” Education Minister Jason Clare said on Thursday. And there’s more to come. Labor has promised to wipe a further 20 per cent off student debts if Prime Minister Anthony Albanese wins the next election.
The Opposition Weighs In
But not everyone is thrilled about the move. The opposition has questioned how the government can afford to pay for the policy, labelling it a “cash splash”. Shadow foreign affairs minister Simon Birmingham told Sky News in November, “I think the initial reaction is, ‘Where is the money coming from?’”
A Look at the Bigger Picture
When Anthony Albanese was elected, he inherited an improving budget position that has enabled the couple of budget surpluses we have seen. However, the actions of this government, the big spending decisions of this government, have created a… deteriorating position that will see higher deficits in the year ahead.”
The Surprising Reality of Student Debt
Under Labor’s promise to cover $16 billion of student debt, even those who have left the country will have the taxpayer step in. And get this – some students who have failed to pay off eye-watering university loans will also have taxpayers foot the bill. Australian Tax Office data obtained by Sky News has revealed at least 50 students have racked up more than $250,000 each in HELP loans (formerly HECS). The highest debts, many of which will never be paid off, include one student who owes a staggering $831,675.
That’s some serious student debt. But with the government’s refund, things might just be looking up for uni students and grads this holiday season.