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$700,000: ATO reveals Aussies' eye-watering univeristy debts

One student has amassed uni debt exceeding $700,000.

Composite image of Australian $100 notes in cash and a crowd of people waking in the Sydney CBD to represent HECS/HELP debt
Some Aussies have generated massive HECS/HELP debts. (Source: Getty)

The Australian Taxation Office (ATO) has revealed which Aussies have the largest HECS/HELP debts and it's not pretty, with one especially distinguished scholar racking up over $700,000 in debt.

The next largest loan balance is substantially smaller, but still eye-watering at just over $495,000, and a big jump from the third largest balance of $387,0000.

Balances then decline gradually over the rest of the series to a more modest $219,000, with the median balance coming in at around $230,000. However, that's almost 10 times larger than the average Australian HELP balance of $24,770.75. So how did these balances get so large?

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As a contextual note at the end of the ATO document lays out, the majority of these debts were accrued prior to 2020, when the HELP loan limit was introduced. Since 2020 most students have been subject to a limit of just over $100,000, with students studying certain subjects like medicine having access to a larger limit.

List of highest HECS debts
One Aussie student has racked up more than $700,000 in HECS-HELP debt. (Source: ATO)

"In relation to the information in the document, most of the amounts were acquired by individuals prior to the commencement of the HELP loan limit policy for higher education which commenced in 2020," the ATO said. "The loan limit policy places a cap on the amount that students can borrow to cover their tuition fees.

"In 2023, the HELP loan limit is $113,028 for most students. The limit for students studying medicine, dentistry and veterinary science courses leading to initial registration, or eligible aviation courses with census dates in 2023 will be $162,336. HECS-HELP debts with a census date prior to 1 January 2020 are not covered by the HELP loan limit policy."

Senator for NSW and Greens spokesperson for Education Dr Mehreen Faruqi
Greens spokesperson for Education Dr Mehreen Faruqi has called for an end to HELP balance indexation and a rise in the HELP repayment threshold. (Source: Australian Greens)

Although HELP debts don't technically accrue interest, they are indexed annually with inflation, so even students at the lower end of the table will be in for a rude shock come June 1, when HELP debts are set to index higher by at least 7 per cent.

In light of this, Greens spokesperson for Education and Senator for NSW Dr Mehreen Faruqi has been calling for an urgent end to the indexation of HELP debts, and for the minimum repayment income threshold to be lifted in order to reduce the burden on students and graduates.

Australian incumbent Prime Minister Scott Morrison
The Scott Morrison government slashed the HELP repayment threshold in 2018 and again in 2019, forcing working students and graduates to start paying back their HELP debts early. (Source: Alex Ellinghausen/Pool via Reuters) (POOL New / reuters)

In 2018, and again in 2019, Scott Morrison's Liberal/National Party Coalition government introduced drastic changes to the HELP system, forcing working students and graduates earning little more than minimum wage to commence paying back their HELP debts early. In 2017, prior to the changes, the HELP repayment threshold stood at $56,000, just above the median wage at the time of $53,000.

However, the following year, the Morrison government lowered the repayment threshold to $52,000, before lowering it again in 2019 to 45,881. The HELP repayment threshold for the 2022-23 financial year now sits at $48,361, 13% lower than it was in 2017, and a shocking 25% below today's median wage of $65,000.

Tertiary Education in Australia: A brief, non-exhaustive timeline

  • 1974: Whitlam Labor government abolishes tuition fees, establishing free tertiary education

  • 1976: Fraser Liberal government attempts to re-introduce fees for second and post-grad degrees, backs down in face of protest

  • 1982: Fraser government successfully introduces fees for international students

  • 1986: Hawke Labor government introduces $250 administration fee

  • 1989: Hawke government introduces HECS student loan scheme

  • 1990: Hawke government allows universities to charge up-front fees for some post-grad courses

  • 1994: Keating Labor government deregulates fees for post-grad courses, allowing universities to charge whatever they like

  • 1997: Howard Liberal government increases HECS fees substantially, introduces separate bands, higher fees for science, medicine law

  • 2005: Howard government increases fees by a further 30%, renames scheme HECS-HELP

  • 2013: Gillard Labor government cuts university funding by $2.3 billion

  • 2014: Abbot Liberal government attempts to deregulate fees and slashes funding, backs down on deregulation after changes defeated in senate

  • 2018: Morrison Liberal government drops repayment threshold to $52,000, below median wage

  • 2019: Morrison government drops repayment threshold even lower to $45,881, well below the median wage

  • 2020: Morrison government increases fees for humanities, arts and social sciences, Labor vows to reverse changes if elected

  • 2022: Labor softens talk on reversing changes, saying they will be examined

  • 2023: Greens call for an end to debt indexation and raising HELP repayment threshold

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