BUSY At Work is proud to support the proposed legislation recently announced by the Government stating they will cut student debt of more than three million Australians in this month’s Budget. This represents great news for students, and along with university students with a HELP loan, students with a Vocational Education and Training (VET) Loan and Australian Apprentices with an Australian Apprenticeship Support Loan are also set to benefit.
The Australian Government announced that the Budget will be all about easing pressure on Australians and continuing the fight against inflation at the same time as they are set to lay foundations for future growth in our economy.
This action taken will wipe around $3 billion in student debt – easing pressure on workers and students across the country.
It will provide significant relief for students while continuing to protect the integrity and value of the HELP and other student loans systems, which have massively expanded tertiary access for more Australians.
In response to the Australian Universities Accord, the Government will cap the HELP indexation rate to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June 2023.
The Government will backdate this relief to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on 1 June last year.
This will benefit all Australians with a HELP debt, fixing the issue of last year’s spike in the CPI indexation rate of 7.1 per cent and preventing growth in debt from outpacing wages in the future.
The 2023 indexation rate based on WPI would only have been 3.2 per cent.
An individual with an average HELP debt of $26,500 will see around $1,200 wiped from their outstanding HELP loans this year, pending the passage of legislation.
Minister for Skills and Training Brendan O’Connor said, “This continues our work to ease cost of living pressures and reduce and remove financial barriers to education and training.
“VET Student Loans and Apprenticeship Support Loans support many Australians to get the skills they need for secure and rewarding careers, and these changes make sure that help is provided on a fairer basis.
“By backdating this reform to last year, we’re making sure that those with student loans affected by last year’s jump in indexation get this important cost-of-living relief.”
