On June 1 2022, student debts were indexed by 3.9%. On June 1 2023, student debts will be indexed by 7.1%
Based on the CPI forecasts in the May budget, the parliamentary library has estimated that next year, student debts will be indexed by around 3.9%. This estimate means that in just two years of the Labor Government, student debts could increase by an astronomical 15%.
In a scenario where a person graduates with the average student debt of around $24,770.75, their student debt will increase by $3,868 between 2022-2024 assuming they do not make any repayments during this period.
A person with a student debt of $50,000 will see an increase of $7,808 between 2022-2024 assuming they do not make any repayments during this period. For a person with a student debt of $100,000, the increase would be $15,617.
Australian Greens Deputy Leader and Education spokesperson Senator Mehreen Faruqi, who introduced a bill to freeze student debt last year, has demanded the Government urgently intervene to stop these increases.
Senator Faruqi said:
‘Under just two years of Labor Government, student debts could rise by an astounding 15%, trapping countless Australians in a student debt spiral.
“The government knew that indexation would be high this year and now they know it will be high next year too. To allow student debts to rise at this pace is negligent and just plain cruel.
“These increases to student debt are wholly unsustainable. Student debt should not soar every time inflation is high. The system needs to change, and that starts with ending indexation.
“If the Government refuses to provide a reprieve, the Greens will absolutely make this an election issue.
“The government can’t just shrug their shoulders and allow millions of Australians to be swept away by a student debt avalanche. There is still time to stop this.
“Corporate profiteering has driven more than two-thirds of the nation's inflation problem but students have paid, and will continue to pay the price, unless the Government intervenes.
“Ultimately, TAFE and university should be free and all student debt wiped.”