While there is no interest charged on HELP debt, there is an indexation added to the debt every year on June 1. This year there will be a significant increase in the rate to 7.1%, the highest we’ve seen since 1990.
Approximately three million Australians will be affected by the increase, most of which aged 20 – 29 years of age and it is expected that this increase will add an additional six month to the average repayment time.
Indexation rates for HELP debt
From June 1 every year.
Some Australian students and graduates are considering clearing their HELP debt prior to the indexation increase to avoid the extra cost. It’s important that individuals assess the short-term and long-term impact of balancing significant debts, as HELP payments are irreversible and can have a major impact on one’s financial situation.