TDA exclusive: Over 130,000 Australians made voluntary HECS payments in the month before their student debts rose by 7.1% in June. This is nearly a 300% increase on the year before.
The figures were given to TDA under Freedom of Information laws.
At the start of May, the ATO announced student loans would increase by 7.1% in June – the highest increase in decades. This is because of indexation, which is an annual update to the amount owed to reflect today’s rising prices.
Those with student loans have to make repayments if they earn above a certain amount (now $51,550), but they can also make voluntary repayments.
For example, a person’s $30,000 student debt would have increased by $2,130 (7.1%) at the start of June.
They could voluntarily pay off some, or all, of their debt in May to limit or avoid paying the extra money triggered by indexation.
Here’s a three-year comparison of voluntary payments:
- There were 22,398 voluntary student debt repayments made in May 2021. The incoming indexation rate was 0.6%.
- There were 33,543 voluntary student debt repayments made in May 2022. The incoming indexation rate was 3.9%.
- There were 130,494 voluntary student debt repayments made in May 2023. The incoming indexation rate was 7.1%.