The federal government will cut around $3bn in student debts through a key change to the Hecs and Help programs, reversing last year’s horror indexation hike and delivering a $1,200 saving for the average person.
The measure, to be outlined in this month’s federal budget, will ensure student debts can’t outpace wage growth in the future by capping the indexation rate for Hecs and Help loans – tying them to whichever is lower of the consumer price index (CPI) or wage price index (WPI).
Until now debts have been indexed to the CPI. The WPI has been significantly lower than the CPI in 2022 and 2023, but is expected to overtake the CPI by 2025. In 2023, the indexation rate based on the WPI would have been less than half that of the…
