HECS/HELP debt has long been considered the cheapest form of debt. Many of us – or perhaps our children – have tens of thousands of dollars sitting in debt, accumulated from years of study. For a long time, we’ve been able to put this debt aside, thinking of it as a ‘future problem’. But perhaps it’s time to give it another look…
After the release of the March inflation data last month, it appears that HELP debts will be hit with a 7.1% increase on 1 June this year (unless the Government decides otherwise in the budget).
This is a big increase. Unlike most forms of debt, HECS and HELP debt aren’t hit with interest rates. Rather, an indexation rate is applied to the loan each year based on inflation and changes to the cost of living.
If you or a loved one has outstanding HELP debt, it’s worth considering what a significant increase in this debt would mean. For the first time in a long while, it might make sense for some individuals to make a voluntary repayment (partial or full) before the end of May. If you’d like to speak to an adviser, contact us here. We can help you figure out what’s the best move in your situation.