Three million Aussies about to owe government extra $1113

Bishop stabbed in Western Sydney speaks

The average student debt is going to increase by at least $1100 in June, according to new parliamentary projections, but Prime Minister Anthony Albanese has hinted relief is coming in next month’s federal budget.

Almost three million Australians have student debt, which will increase on June 1 when HECS-HELP indexation comes into effect.

According to projections done by the Parliamentary Library for the Greens released this morning, this year’s indexation will be the second highest on record at between 4.2 to 4.8 per cent, trailing only last year’s 7.1 per cent increase.

The exact rate won’t be known until after the March inflation figures are announced next week, but even the low end of the estimate will see the average student debt of $26,494 rise by $1113, according to the Greens.

If indexation is the full 4.8 per cent, that amount will increase to $1272.

The Greens have used the figures to repeat their calls for indexation to be abolished.

“In the May budget, Labor must scrap indexation on student debt,” education spokesperson Mehreen Faruqi said, adding that “there is still time to stop the massive indexation hit coming again this June”.

“Student debts are spiralling out of control.”

Questioned about the impending rise on radio this morning, Albanese indicated there would be some form of relief for those with student debt in the May 14 budget, although remained tight-lipped on what that would actually be.

“I think there’s a range of areas where we need to do much better with the younger generation, and HECs is one of them,” the prime minister told HIT Central Queensland.

“We’ve received a review of that… and what that has said is that the system can be made simpler and be made fairer.

“The idea of HECs is a good one. It’s one that has led to a massive expansion, the number of people being able to do university degrees.

“But we’re examining the recommendations and we’ll be making announcements pretty soon on that. We, of course, have a budget coming up.”

The review – the Australian Universities Accord, which was released in February – didn’t call for indexation to be scrapped, but did recommend that it be tied to whichever is lower out of inflation or the wage price index.

The current settings only take inflation into account.

Although it is usually lower than the increase in wages, that wasn’t the case in recent years, meaning the increases in debt were outpacing current and former students’ means to pay it back.

The Universities Accord final report also recommended that student fees be based on the potential life time earnings associated with the course someone is studying.