The interest rate increase for this year was 7.10% and my debt is high. So I was wondering what would happen in a worst case scenario of extreme inflation. Quite possibly, such a thing has not yet been considered, what would/might happen?
To ensure study and training loans maintain their real value we calculate the indexation rate each year based on the prior two years statistics from the Australian Bureau of Statistics. They calculate the cost of living to determine the consumer price index (CPI).
The way we calculate the indexation rate would not change.
If possible making voluntary payments throughout the year to reduce the loan balance can help with reducing the amount of indexation applied each year to the loan balance.
Keep in mind voluntary payments don’t replace the end of financial year compulsory payment.
To ensure study and training loans maintain their real value we calculate the indexation rate each year based on the prior two years statistics from the Australian Bureau of Statistics. They calculate the cost of living to determine the consumer price index (CPI).
The way we calculate the indexation rate would not change.
If possible making voluntary payments throughout the year to reduce the loan balance can help with reducing the amount of indexation applied each year to the loan balance.
Keep in mind voluntary payments don’t replace the end of financial year compulsory payment.
Hello, after I posted that question above, I saw on the many news channels that my 2023 HECS increase would be readjusted and reduced from 7.1% CPI rate to about 4% or so as that reflected wage increases rather than CPI. It also said that this years would be calculated and reduced in a similar fashion. But there has been nothing to indicate that on my debt online. Any answer to this please??
Hi @MarkusFunkus,
That's right, you won't see a change yet. These adjustments aren't law yet, and we're not sure when the legislation will pass. Keep an eye on the Department of Education's website for updates.
For more info about the Changes to HECS-HELP indexation and what it means for you, see our article.
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