Australians with student debts are set to have hundreds of dollars added to their loans amid calls to change how increases are calculated.
Some 2.95 million Australians have a Higher Education Loan Program (HELP) debt, such as , totalling more than $78 billion in outstanding debt, according to the most recent Australian Taxation Office (ATO) data.
The average debt is almost $26,500, and that will increase through indexation based on the March quarter inflation figure. That figure is yet to be released, but forecasts have emerged.
Harry Murphy Cruise, an economist at Moody’s Analytics, told The Guardian on Wednesday that “partial data” suggested inflation would come in at 3.35 per cent year-on-year for the March quarter. That would be almost on par with the latest, and more volatile, monthly figure which .
If that prediction eventuates, the average student debt would increase by almost $900.
That would be lower than last year — a more than 30-year high — increasing the average debt by $1,700.
But the figure would also be higher than pre-COVID times; the indexation rate hovered around 2 per cent between 2018 and 2020.
Australia’s growing student loan debt
Between 2005 and 2023, total outstanding debt grew from about $12.4 billion to more than $78 billion.
Meanwhile, the number of people who carry a HELP debt increased from about 1.85 million to 2.95 million.
That has come against the backdrop of and changes to higher education policy. Notably, between 2012 and 2017 a demand-driven funding system was in place which lifted caps on government-funded enrolments.
Then in 2021, changes under then-Liberal prime minister Scott Morrison saw fees for some degrees soar, while others that aligned with skills shortages fell.
The majority of outstanding debt is held by students in Australia’s three most populous states: NSW (over $24 billion), Victoria (over $22 billion), and Queensland ($15 billion).
The average HELP debt was about $10,500 in 2005 and was almost $26,500 in 2023.
As it has grown, so too has the average time it takes to pay it off — from about seven to almost 10 years.
People living overseas held over $1 billion in debt, while females had more debt than males across every age group.
Debts most commonly existed in the $20,000-$60,000 range, with around five people still needing to pay off a debt of over $400,000.
Last year it was revealed a person of student debt, understood to be Australia’s highest amount.
HELP debts have also been described as .
Last financial year, the ATO collected $4.9 billion from students paying back HELP-SFSS (Student Financial Supplement Scheme) loans, which includes HECS (Higher Education Contribution Scheme).
In contrast, the petroleum resource rent tax generated $2.2 billion. In January, Richard Denniss, executive director of progressive think tank the Australia Institute, called on the government to reform the nation’s “third world tax system”.
“Thank you, children! You’re the backbone of our economy, not the gas industry,” he said.
Calls for HELP changes
Federal Teal MPs recently to the way higher education loans are hiked alongside inflation, saying the existing system is unfair.
They want Education Minister Jason Clare to peg HELP debt increases to the lower of two figures, either consumer price inflation or wage growth, “so people aren’t going backwards”.
The same recommendation was made in the , released last month.
Clare has previously said there was , labelling the current method “not right”.
He is considering the report’s recommendations.
