Number of students repaying HECS debts doubles to 1 million

For the first time since HECS student loans started in the late 1980s, more than 1 million people are now making repayments.

Australian National University higher education researcher Andrew Norton. Photo: Aaron Francis

For the first time since HECS student loans started in the late 1980s, more than 1 million people are now repaying a higher education debt for tertiary study.

The latest annual taxation statistics from the Australian Taxation Office show that 1,032,737 people were repaying student debt to the commonwealth in 2019-20, 23 per cent more than the previous year.

Overall, the number of people making HECS repayments in 2019-20 was nearly double the number making repayments four years earlier, in 2015-16.

While the student-debt scheme is popularly known as HECS, its correct name is the higher education loan program (HELP) and it includes student loans for full fee-paying students as well as those with commonwealth-subsidised university places. Australian National Uni-versity higher education research Andrew Norton said the sharp increase was partly due to the rise in student numbers from the demand-driven funding system (which ended in 2018) that had no restriction on the number of students accessing HECS-HELP loans.

Professor Norton said there were other factors contributing to the increase in the number of repayers, including the subdued real-wage growth in the 2010s that slowed down the rate of repayment of debt because it was tied to income levels.

Another factor is the introduction of lower-income thresholds for repayment of student loans, which were lowered in 2018-19 and then again in 2019-20.

While the number of people repaying student debt has increased sharply, the amount repaid rose by only 8 per cent to $3.6bn in the year to 2019-20.

The tax data also showed that 13,125 Australians resident overseas repaid $68.5m in 2019-20.

Overseas residents have only been required to make student-debt repayments since 2016-17 and it is difficult for the government to enforce overseas repayments until the debtor returns to Australia.