HECS debt will increase on June 1 as new indexation is applied.

More than three million Australians with higher education loans will face higher repayments as the second-highest indexation increase on record is applied from June 1. Unpaid HECS-HELP loans will rise by 4.7% on Saturday, indexed annually to the consumer price index (CPI). This follows an expensive 2023 when a 7.1% indexation hike was implemented. To alleviate some of the financial burden, the federal government plans to cut about $3 billion in student debts by tying the indexation rate to the lower of the CPI or the wage price index (WPI). The WPI is expected to surpass the CPI by 2025. Education Minister Jason Clare stated that once the new legislation passes later this year, loans will be backdated to June 2023 to apply the changes.