Banks Told To Include Hecs As Income Reduction

HECS debt reduction or wipe off unlikely

Banks told to include HECS as income reduction

Inflation increases HECS debt

The likelihood of HECS debts ever being universally reduced or wiped off is extremely unlikely. The Australian Prudential Regulation Authority (APRA) has told banks to consider HECS as both an income reduction and to include the debt in credit assessments. This means that HECS debts will be taken into account when banks are assessing how much money you can borrow and at what interest rate. For example, if you have $10,000 in HECS debt and inflation is 7%, you will be charged $710 in interest on your debt. This will increase your total debt to $10,710. If you are considering paying off your HECS debt, you should be aware of the potential impact of inflation. If inflation is high, your debt will increase faster than you are paying it off. This means that it may take you longer to pay off your debt and you may end up paying more interest. You can pay off your HECS debt through your tax return or by making voluntary payments. If you are struggling to pay off your debt, you can contact the ATO to discuss your options.