$3 billion in HECS wiped from Aussie MyGov accounts

If you can actually remember your MyGov login, you should probably take a squiz at how much HECS you owe after tonight.

If you can actually remember your MyGov login, you should probably take a squiz at your HECS balance tonight.

The Labor government has just delivered a win for Australians still paying off their student loans, following strong public backlash over heavy indexation that has left countless feeling like they’ll never be rid of their uni bill.

The government has now wiped $3 billion in HECS-HELP debt off the books, giving some relief for current and former students across the country as we head to the holiday season.

The latest change means that, on average, Australians with a student loan balance of $27,000 will see around $1,200 added as a credit to their outstanding debt.

Those who paid off their HECS debt in 2023 or 2024 will receive also refund for the credit.

The issue of indexation has been a hot topic amongst young people, especially those who switched degrees and accumulated thousands more in debt than they had initially planned.

The reform, backdated to June 2023, is part of a broader shift in how student debt indexation is calculated in Australia.

Balances of around $8,000 were given a $500 credit. Aussies with a student loan balance of $27,000 will see around $1,200 back in their pockets.

Previously, student loans were tied to the Consumer Price Index (CPI), which led to a sharp 7.1 per cent hike in loan balances last year. Under the new system, the annual indexation will be determined by whichever is lower: the CPI or the Wage Price Index (WPI).

“The Universities Accord recommended indexing HELP loans to whatever is lower out of CPI and WPI. We have done this, and gone further,” Minister for Education Jason Clare said.

“We have backdated this reform to last year. This wipes out what happened last year and makes sure it never happens again.”

Those who paid off their HECS debt in 2023 or 2024 will receive also refund for the credit.

“We’ve backdated this reform to last year, wiping out the burden of the previous spike and ensuring it doesn’t happen again.”

For Australians wondering how the change affects their own loans, they can log into their Australian Tax Office (ATO) account via MyGov to check their new, reduced debt balance.

With the next federal election on the horizon, the Albanese government is promising even bigger cuts to student debt.

Labor has committed to reducing HECS debt by an additional 20 per cent, meaning graduate with an average HELP debt of $27,600 would see a whopping $5,520 wiped from their loan.

This new plan will also extend to other income-contingent loans, including the Vet Student Loan and the Australian Apprenticeship Support Loan.