Victorian HECS debts rise almost $2000 following indexation

The highest indexation rate in 30 years has taken a toll on Victorians with university debt, as loans balloon by on average $2000 for more than 800,000 graduates.

The average university debt has ballooned by almost $2000 following the massive indexation increase, new figures reveal.

More than 800,000 Victorians are saddled with a HECS-HELP loan for their tertiary studies, with the average debt soaring to $27,620 this year.

This is up a whopping $1920 from the 2021-22 average of $25,700, after 7.1 per cent indexation was slapped onto balances in June.

More than $2.9 billion worth of voluntary repayments were made nationwide as Aussies tried to offset the highest indexation rate in more than 30 years amid the cost of living crisis.

But latest Australian Taxation Office figures show it takes 9.6 years on average to repay the loan.

Education Minister Jason Clare said the Australian Universities Accord were investigating affordability issues and the way the HELP system works.

Mr Clare said the Australian Universities Accord were investigating affordability issues and the way the HELP system works. Picture: Emma Brasier

“The Accord team is working on how to fix this and what other changes might need to be made, including the most appropriate way to reduce the volatility of the current indexation method,” Mr Clare said.

“I look forward to receiving the Accord Final Report at the end of this year.”

More than three million Australians have a student debt under the Higher Education Loan Program (HELP).

Females between the ages of 20 to 29 years make up the largest cohort of people with a student debt.

Repayments start when a person earns above the minimum threshold, which is $51,550 this year, and are made at rates consistent with their income.

The HELP loan limit is $113,028 for most students, with people studying medicine, dentistry, veterinary science, or eligible aviation courses able to access up to $162,336.

Almost 45,000 Victorians have student loans over $100,000.

But opposition education spokeswoman, Senator Sarah Henderson, said the skyrocketing increase in student debt was further evidence that Labor’s cost of living crisis was hitting young Victorians hard.

Ms Henderson, said the increase in student debt was evidence that Labor’s cost of living crisis was hitting young Victorians hard. Picture: Martin Ollman

“With another big increase in HECS loans expected next year, it is clear the Albanese government has no plan to fix the cost-of-living crisis so many young Australians are facing,” Senator Henderson said.

The Victorian government recently announced that people who enrol in secondary teacher training in 2024 and 2025 will have their HECS paid for by the state if they commit to working two years at a public school.

The move aims to address teacher shortages in the state but was met with criticism from current teaching students who missed out on the incentives.

The federal government will on Thursday open applications for 10 new regional university study hubs in a bid to give more students from the bush access to tertiary education.

A second round for an additional 10 study hubs is expected to open at a later date.

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