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Federal government announces plan for major HECS debt relief


Credit: Adobe Stock (Education Licence)

The Australian government has announced plans for $3 billion of HECS debt fees to be “wiped out” as part of the cost-of-living relief efforts.


High indexation has seen HECS debts rise faster than wages. Last year, indexation rose by 7.1 per cent and thousands of dollars were added to individual debts.


Last Sunday, the Federal government revealed they plan to cap indexation at a lower rate in the May 14 Budget to prevent sharp rises happening in the future.


The proposal will be backdated to June 1 2023, and Federal Education Minister Jason Clare said it will ensure last year’s steep increase “never happens again”.


“This will wipe out around $3 billion in student debt for more than three million Australians,” Clare said.



The change follows the overwhelming success of the Independent MP Dr Monique Ryan’s petition to reform the HECS system, which received more than 288,000 signatures.

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Credit: Make our HECS debts easier to pay off! petition at Change.org

“Today, we won,” Dr Ryan said in a statement on X.


“It was a broken system. I’m glad the government has changed it.”


Troy Williams, Chief Executive of the Independent Tertiary Education Council Australia (ITECA), “welcomes” the change, but says the government must also end the student loan tax.


“ITECA welcomes the fact that this important measure will support students,” Mr Williams said in a statement to the media.


“But it’s abhorrent that the Australian Government whacks a 20% student loan tax on the debts of people investing into study.”


Further financial relief is expected. Recommendations have also been made to lower the cost of certain degrees and address how HECS debt impacts eligibility for bank loans.


The Federal Budget will be delivered next week on Tuesday, May 14.



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