University graduates, already struggling financially amid the cost of living crisis, are now facing a further burden as student debt is set to rise significantly this year. The Higher Education Contribution Scheme (HECS) debt is expected to increase by 4.8% when indexation is applied on June 1, according to analysis of inflation data cited by the Greens. This increase is higher than the 3.6% inflation figure for the year to March due to the calculation method. The average HECS debt currently stands at around $26,500, which means that the average student debt will increase by more than $1250. Independent MP Monique Ryan has condemned the increase, stating that it is “untenable” and that it will result in hundreds of thousands of Australians with HECS debt either struggling to keep up with repayments or seeing their debt increase despite working hard to pay it off. The mandatory HECS repayments for people on $60,000 would have been about $1200 in the past year, but this would have barely made a dent in the overall debt due, Ryan said. The increase will come into effect on June 1 and will be lower than last year’s 7.1% hike. The Greens have also criticized indexation, saying it is locking young people out of the housing market. Greens senator Mehreen Faruqi stated that “ballooning student debt is hitting young people, women, and renters the hardest, the same people who are being slammed by the cost of living and housing crisis.” The University Accord report recommended changes to the HECS system, and Finance Minister Katy Gallagher has stated that the government has been looking at HECS but has not yet committed to any changes in the upcoming May budget. Gallagher acknowledged that issues around HECS indexation arose when Australia was going through high inflation, such as last year’s hike, and that any changes must consider the potential impact in different economic conditions. As of June 1, 2023, approximately three million Australians owed $74 billion in student loan debt.
Student Loan Woes: HECS Debt Set to Jump, Adding to Cost of Living Anguish
