The government is finally making moves on that student debt relief they’ve been teasing us with for months. Today, they’re dropping a bill in Parliament that could potentially wipe $3 billion off our collective HECS-HELP debts. Let’s break down what this means for your wallet and your future.
What is the new HECS bill?
The government is introducing legislation to change how HECS-HELP debts are calculated, a move they first announced back in May. The big focus here is on indexation – that annoying annual increase that makes your debt grow even when you’re not looking. Currently, HECS-HELP debts are tied to inflation, which has been skyrocketing lately. Last year, debts jumped by a whopping 7.1%, the highest since 1990.
The bill also includes the Commonwealth Prac Payment, which will allow students in certain fields, like nursing and teaching, access to a weekly $319.50 payment during unpaid placements.
How will the new HECS-HELP bill change things?
If this bill passes, HECS indexation will be based on whichever is lower: the Consumer Price Index (inflation) or the Wage Price Index (how much wages are growing). This is huge because it means your debt won’t grow faster than your paycheck.
Plus, they’re planning to backdate this change to last year, so you might see some relief on your current balance. AKA last year’s WPI of 3.2% will be applied to your debts, instead of the CPI of 7.1%.
What does this mean for your wallet?
According to the government, this change could wipe out about $3 billion in HECS-HELP debt for over 3 million Aussies. On average, people with HECS-HELP debts could see around $1,200 knocked off their balance. If you’ve got a bigger debt, you might save even more.
When will you see the benefits?
The bill still needs to be passed by Parliament. The government is aiming to get it through before the end of the year. But don’t worry, if it does pass the changes will be backdated to last year. So even if you’ve been better than everyone else and furiously paying off your debt, you might get some cash back.
A spokesperson for the Federal Education Minister Jason Clare told ABC:”Anyone who paid off their HELP loan during the year will receive an indexation credit once legislation has passed and the Australian Taxation Office (ATO) has processed the indexation credit.”
They went on to say, “Individuals who have fully paid their HELP loan may receive their indexation credit as a cash refund, if they have no other tax liability.”
The bottom line
While this isn’t a total HECS-HELP wipe-out, it’s definitely a step in the right direction for anyone drowning in student debt. Keep an eye on this bill as it moves through Parliament – it could mean the difference between years of repayments and a slightly lighter financial load.
The post The Government Introduced A New HECS Bill Today, Here’s How It Could Help Lower Your Debt appeared first on PEDESTRIAN.TV .
