It has been announced that in the 2024 budget amendments are being made to the way HELP (Higher Education Loan Program’s) are being indexed to make it more fair for all Australians with a HELP Loan.
New Legislation
Previously, HELP loans were indexed based on the Consumer Price Index (rate of inflation). The new legislation is put in place means that your HELP loan will now be indexed by the lesser of; the Consumer Price index (CPI) or the Wage Price Index (WPI). This will backdate to the 2023 financial year.
How will this affect you?
Last financial year (2022 – 2023) a higher than usual CPI resulted in an indexation rate of 7.1%. The WPI was 3.2%. If you have an average HELP loan of $26,500, under the previous law you would have been charged $1,881. Under the new legislation, if you were to have an average loan ($26,500) you will automatically receive a credit of roughly $1,033, so that your HELP loan has only been indexed by $848 (3.2% -WPI) in the 2023 financial year. The loan will also be indexed at only 4% being the WPI not 4.7% being the CPI for the 2023 – 2024 Financial year.
