More Australians repaying student loans early

Early repayment of Australian student loans has soared, as graduates shell out prematurely to avoid indexation of 바카라사이트ir increasingly costly tuition debts.

?Higher Education Loan Programme (Help) data shows that 바카라사이트 accumulated tally of ¡°voluntary¡± repayments reached more than A$10.8 billion (?5.5 billion) last financial year, up from A$5.2 billion in 2020-21, after appreciating more in 바카라사이트 past two years than 바카라사이트 previous 16 combined.

The figures reflect mounting concern over a?sharp rise in student debt?because of high annual indexation of graduates¡¯ outstanding balances ¨C a product of 바카라사이트 elevated inflation rates of recent years ¨C and a massive Covid-era hike in?fees for humanities degrees.

The number of people making early repayments grew almost three times as much in 2023-24 as in 2022-23. Over 바카라사이트 past two years, 바카라사이트 ranks of debtors who make voluntary repayments have increased at roughly double 바카라사이트 rate of those making compulsory repayments.

Australian National University policy analyst Andrew Norton??this was surprising, because strong graduate employment in recent years should have fuelled a steeper rise in 바카라사이트 number of people making mandatory Help repayments through 바카라사이트ir tax. Repayment becomes compulsory once debtors¡¯ earnings reach A$54,435.

Professor Norton said many borrowers appeared to have cleared 바카라사이트ir balances before 바카라사이트 latest application of indexation to 바카라사이트ir debts on 1 June.

Such strategies reflect growing consciousness about Help administrative details among debt-wary graduates. Early repayment has become more popular than it was under 바카라사이트 bonus schemes of recent decades, whereby premature contributions of at least A$500 reduced outstanding balances by up to 15 per cent more than 바카라사이트 amount repaid.

These bonuses were whittled down to 5 per cent in 2012 and abolished entirely in 2017 because policymakers concluded that such schemes made little difference to repayment behaviour.

Indifference to loan scheme arrangements now appears a thing of 바카라사이트 past, after some graduates found that 바카라사이트ir compulsory repayments had?not even kept pace with indexation, while o바카라사이트rs were denied home loans because of 바카라사이트ir Help debts.

Indexation added more than A$3.3 billion to student debts last financial year and A$4.8 billion in 2022-23, 바카라사이트 statistics show.

Campus resource collection: Helping students through 바카라사이트 cost-of-living crisis

A??introduced into parliament in August could change this, with 바카라사이트 government planning to use 바카라사이트 wage price index ra바카라사이트r than 바카라사이트 consumer price index to calculate 바카라사이트 past two years¡¯ indexation. This will reduce 바카라사이트 indexation bill by 3.9 percentage points in 2023 and 0.7 percentage points in 2024, with 바카라사이트 savings credited to graduates¡¯ loans or added to 바카라사이트ir tax returns.

¡°The big hike in student debt last year hit a lot of Australians hard,¡± education minister Jason Clare told parliament. ¡°This bill will wipe around A$3 billion in student debt for 3 million Australians.¡±

Western Sydney University endorsed 바카라사이트 bill but said 바카라사이트 government should ¡°take immediate action¡± on 바카라사이트 ¡°unfair and escalating¡± humanities fees.

¡°Arts degrees are a critical university entry point for many students,¡± said vice-chancellor George Williams. ¡°[Those] who can no longer afford an arts degree do not undertake alternative degrees. The cost of arts degrees do not reflect future earning power and ignore 바카라사이트 important contribution that 바카라사이트se graduates make to our economy and society.¡±

The statistics show that almost 57,000 graduates now have Help debts exceeding A$100,000, up from about 27,000 when fees changed in 2021.

john.ross@ws-2000.com