HELP debts growing rather than shrinking

Generations of young Australians have been sold the view that HELP debts – the loans that cover university tuition fees – are interest free. And strictly speaking, that’s true.

University tuition fees are incurred at different charge rates based on the course and the provider. Interest is not charged on HELP debts but as always, there’s a hidden sting. Indexation – or CPI – is added to your HELP debt on 1 June each year to adjust in line with inflation.

As we know, however, inflation has been running rampant in the past year, so the indexation rate on HELP debts for the 2023 financial year is a whopping 7.1%. This huge increase has seen many debts actually grow throughout the financial year, despite payments being made.

This has come as a shock to many, who’ve seen their pay packets shrink due to regular payments being deducted, while their HELP balance increased. Unfortunately, there’s not much that can be done to decrease the impact of HELP debts, and unfortunately repayments are not tax deductible.

However, if this is an issue for you or your kids, please reach out and we’ll do what we can to help.