Student debt indexation to have lifelong impacts on Australians' borrowing capacity

More than 3 million Australians will see their student debt rise in line with inflation tomorrow, adding more than $1,000 to the average loan and sparking warnings of a lifelong impact on borrowing capacity. Key points: The average $25,000 HECS-HELP debt will rise by $1,775 because of indexation There is more than $74.3 billion in outstanding HECS-HELP debt Debts affect the ability of more than 3 million Australians to secure other loans such as mortgages Indexation of 7.1 per cent — the highest in more than three decades — will be applied to more than $74 billion in outstanding HECS-HELP and vocational education loans. "Many graduates and current students view HECS debt as cheap, interest-free loans, however, with these indexation levels, it's a view that's clearly flawed in this new reality," she said. Ms Hill's study found 59 per cent of respondents reported student debt had impacted their ability to buy a home, with 51 per cent still repaying debt in their 40s. "I feel like all my debts which are considered regular factors of life — student debt, home loan et cetera — are sending me further and further backwards," he said.