If you’re currently a university student, you might be asking ‘why have my HECS just gone up?’
Well, as of June 1st, HECS debt has been raised by 3.2% due to indexation, an annual increase that adjusts debt to match with current rising prices.
Indexation is managed by the Australian Taxation Office and has historically been tied to inflation, which in Australia currently sits at a rate of 2.4%, inside the target rate of 2-3%.
In 2024 however the ATO introduced reforms to use the Consumer Price Index and the Wage Price Index to help cap indexation at a level that is no higher than current wage prices. The reform is estimated to have saved a total of $3 billion dollars, therefore relieving cost of living pressures as students in particular face additional financial burden.
To alleviate this financial burden even more, the Labor Government ahead of the 2025 Federal Election promised to discount HECS by 20%. The cut is estimated to remove $16 billion from student debt via a one time discount.
This HECS discount did not come into effect before the indexation increase as legislation has yet to be introduced into Parliament, which returns for its working year on the 22nd of July. Only once legislation is passed by both the House of Representatives and the Senate students will see a decrease in their debt.
Sophie Janusko 