AFP
The Labor government’s long-awaited reforms to student debt indexing are finally being implemented, six months after their announcement.
While not all student loan balances have been updated, some individuals have begun to receive debt notifications.
What you need to know:
The Australian Government has enacted legislation to alter the indexing of debts from the Higher Education Loan Program (HELP). Student loans will now be adjusted annually based on the lower rate between the Wage Price Index (WPI) and the Consumer Price Index (CPI). This modification is effective retroactively for the previous two fiscal years.
Consequently, those who have unpaid HELP bills will be credited, which will lower their balance. As long as they have no outstanding government bills, those who have paid off their loans in full since 2023 will be eligible for a return. The goal of this modification is to help those who owe money on their education.
Certain requirements must be met to qualify for a credit or refund on your Higher Education Contribution Scheme (HECS) debt. You will not be eligible for a refund or credit if you paid off your HECS loan in full before indexation on June 1 of last year. On the other hand, you will be credited if you have an indexed HECS debt on June 1 of this year or last year.
The allocation of credit will be determined by the present circumstances. However, one is likely to see the credit lower their remaining HECS debt in case of any outstanding balances. The credit will be converted to a refund if you have already paid off your debt. The Australian Taxation Office (ATO) will directly issue the refund if you have no outstanding ATO payments.
With the indexing in motion, it is anticipated that approximately three million Australians will benefit from this action, which will wipe out a significant AU$16 billion in HELP and other student debts.
The first round of refunds from the government was distributed on Thursday. By the end of January, the majority of people should see credits added to their MyGov accounts, the administration said.
