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HECS indexation: Millions of Aussies set for $1,200 pain from today

HECS debt will be indexed by 4.7 per cent and it's expected to add hundreds or even thousands of dollars onto people's loans.

The student loan debt of nearly three million Aussies is set to rise today as part of the government's annual indexation. HECS-HELP debt gets indexed every year on June 1 against the consumer price index (CPI) to make sure the loan is keeping pace with inflation.

Yahoo Finance has been inundated with messages from Aussies all across the country about how the debt has impacted them. Some have put off going to university altogether because they are worried about accumulating debt, while others have delayed buying a home or even starting a family due to the loan.

Sadly for them, their HECS pain is about to get worse.

Carton of someone holding a ball saying debt, next to Lauren Eardley, next to loads of Aussie cash
The HECS debt of nearly three million Aussies will go up on June 1 and for people like Lauren Eardley (pictured), it's a frustrating reminder of how difficult it is to pay off. (Source: Supplied/Getty)

Are you affected by HECS debt? Email

This year's indexation is 4.7 per cent, which is the second-highest amount in a decade, and will cause the average HECS debt of $26,000 to go up by $1,200.


The government has announced a measure that could wipe $3 billion from peoples' HECS debts, however, that's yet to pass through parliament.

The change would see student loan indexation be tied to whatever is lower out of CPI or the wage price index (WPI). If that was brought in before today, this year's indexation would have been 4 per cent, while last year's humungous 7.1 per cent jump would've only been 3.2 per cent.

The government said it would also backdate this plan to June 1, 2023, which would give people even more credit in their accounts.

This came after Teal MP Dr Monique Ryan launched a petition that attracted nearly 300,000 signatures and called on the government to change the way HECS was indexed.

"I think that was only the first step really, and there's a whole lot that's left to do on HECS that the government has indicated they're considering and that they will hopefully put on the agenda in the next short while," she told Yahoo Finance.

Recent data showed that 2.9 million Aussies have HECS-HELP debt and their collective loan amount was $78.2 billion in 2022–23.

If Labor is able to get its plan legislated then it could take off a decent dent in your HECS debt amount, but that depends on how much you've racked up.

HELP DEBT at June, 30 2023






















*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and are subject to indexation on June 1, 2024 will receive an indexation credit.

Lauren Eardley's $80,000 debt from her double degree is set to go up by more than $3,700 today.

She previously told Yahoo Finance the indexation was a kick in the teeth when she's been trying to pay it off.

"I'm falling into a cesspit of debt, which I’m expecting to be in the millions by the time it dies with me," she explained. "I'm going to have this decision I made when I was 18 hang around me forever.

"I’m scared to ever have kids or use maternity leave [as that might] jeopardise my income. This is a crisis.

"Many women I work with have ended up with a tax bill after maternity leave due to them not paying off enough of their HECS over the year."

Bachelor of Business Marketing graduate Abbey O'Hagan also decided to get proactive with her HECS debt and put in some additional money from her savings to chip away at the loan.

But when it was indexed last year, she was upset at what she saw.

"I spent thousands of dollars last year with the pay-as-you-go (PAYG) option, which meant a large chunk of my wage vanished fortnightly," she wrote in an op-ed for Yahoo Finance.

"But when I checked my balance again after the massive indexation increase, I owed $800 more than last year. I paid thousands to merely tread water."

These are just two examples of what many have been experiencing across the country.

Many might be tempted to imitate O'Hagan's and Eardley's approach and use some of their money to pay off their HECS faster. But is this a good idea?

The answer depends on your situation and what you want to do with your money.

Financial adviser Helen Baker said you have to assess your short and long-term goals.

“If you are having to borrow money, for example, in order to pay that off, if the borrowing rate is at the 7 per cent mark that doesn’t make sense,” Baker told Yahoo Finance.

“Are you breaking into an investment to do it? Have you got money sitting in cash doing nothing? Maybe in that case it does make sense to clear some off.

“What tax bracket are you in? What commitments are you looking forward to? What things might change in your lifestyle going forward in the next few years? Look at all that together to work out whether it makes sense and how much makes sense."

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