Australian voters tend to reject US-style education, favouring more egalitarian systems where income does not determine access.
In the US:
- The average student debt is US $37,693.
- This includes public and private debt.
- On average, individuals repay the debt in 20 years.
- Students often have a gap that is not filled by loans.
For Australian domestic students, the cost of completing a bachelor’s degree is generally between $20,000 and $45,000, excluding some of the higher-value courses. HECS-HELP loans are available for eligible students to cover the cost of tuition up to $121,844 for most degrees and $174,998 for higher-value degrees like medicine. The average higher education student debt in Australia is around $27,000 and, on average, takes just over 8 years to repay. Nearly 3 million Australians have student loan debts totalling over $81 billion. Over 7 million have loans above $100,000.
Student loans start to be paid back when an individual’s income reaches $54,435. The repayment rate scales according to income, ranging from 0% to 10% when income reaches $159,664.
The Government has announced a series of changes to HECS-HELP, including:
- Indexation rate calculation changes to the lower of consumer price index (CPI) or wage price index (WPI) – currently CPI. Intended to be backdated to student loans on 1 June 2023, effectively removing the 7.1% spike that occurred in 2023.
- Increased minimum repayment threshold to $67,000 in 2025-26. The repayments will also be calculated based on income above the new $67,000 threshold rather than total annual income.
- 20% loan reduction for all study and training support loans before 1 June 2025 (around $16bn).
These changes are subject to the passage of legislation and are not yet law.
If these changes affect you, or you would like advice on managing your student debt, get in touch with us. We are here to help.
