According to a recent survey conducted by St George and the Melbourne Institute, student HECS debt has hit a 14-year high. The report indicates that Australians are still heavily affected by the debt accumulated from their tertiary studies, despite no real interest charged on HECS/HELP loans.
Credit card debt, on the other hand, has hit a six-year low. This comes following record low interest rates on loans, which has made it easier for Australians to repay their debts quicker.
The report also shows that four out of 10 Australian households were debt free in the June quarter of this year.
However, HECS debt remains at its highest levels since 2001.
Almost one quarter of the survey respondents indicated that they had debt related to tertiary education – an increase from 20.9% in the previous month.
The increase could be a result of the higher number of Australians undertaking higher education courses as well as the relatively high rate of unemployment among younger Australians.
Three quick tips to reduce your HECS/HELP debt:
- Create a budget. Use a budgetto work out how much extra money you can afford to pay on your HELP debt.
- Make voluntary repayments. You can make voluntary repayments to the Australian Taxation Office at any time and for any amount. The Australian government incentivises early payments by offering a deduction of over $500 for voluntary repayments.
- Make a repayment before 1 June. This will minimise the amount you have to repay as your HELP debt is indexed on 1 June each year, increasing the amount owed to keep up with inflation.
However, if you have credit card debt or a personal loan, it is usually better to pay those debts first because they have interest charged on them.
Debt Free Australia (DFA) has helped thousands of Australians manage their debt through formal and informal debt solutions. Our insolvency experts are licensed and experienced to help anyone struggling with debt.
Call usnow for free financial adviceor to make an enquiry,on 1800 462 767.