How does inflation indexation affect your HECS debt?

University graduates have just seen the largest debt indexation in 32 years.

Transcript

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00:36 - Let me explain how indexation worked

00:38 on my own student debt.

00:40 In 2015, I finished an arts communications degree

00:43 at the University of Sydney.

00:45 At that time, my hex debt sat at about $29,500.

00:50 I started paying that amount down as soon as I finished uni

00:54 with about $1,000 going onto it each year.

00:57 But instead of actually going down,

00:58 by 2017, my hex debt had grown to $30,000.

01:03 I continued to pay a couple thousand dollars into the debt

01:06 each year, yet by 2022, I was still owing $27,000.

01:11 So, after six years, I paid about $6,300 into my hex debt.

01:16 But due to indexation, that debt was remaining at $27,000.

01:22 And that didn't matter to my day-to-day too much

01:25 until I wanted to buy a house.

01:28 Because of that growing debt,

01:29 banks didn't want to loan me money.

01:32 So, in order to secure a loan to buy a house,

01:35 I had to pay my hex debt in full,

01:38 which meant sacrificing nearly $30,000

01:41 from my deposit savings.

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