Aussies hit with record-high university debts
UNIVERSITY debts are soaring and more people are being forced to repay their student loans sooner.
New Australian Taxation Office data obtained by News Corp found in the 2018/19 financial year 3 million people owed a massive $66.5 billion in Higher Education Loan Programme (HELP) debts.
This grew by 8 per cent from the 2017/18 financial year when 2.87 million people owed $61.7 billion.
The average HELP debt is now $22,500 up from $21,500 in 2017-18 financial year.
Financial adviser Scott Haywood said despite the total debt soaring, it is a cheap form of debt for people to have.
"This is one of the cheapest loans other than the bank of mum and dad that anyone can get," he said.
"But the government has identified paying the money back as a problem and they have reduced the compulsory repayment threshold as a result."
From July 1, Australians earning more than $45,881 annually must start repaying 1 per cent of their income towards the loan.
The repayment level increases in percentage increments up to 10 per cent for those earning more than $134,573.
This has been significantly lowered from the previous threshold of $51,957.
This will likely hit more younger Australians who are fresh out of university and in their first full-time jobs.
The ATO also warned they will be contacting people who have HELP debts and have moved overseas and failed to pay it back.
An ATO spokeswoman said for people with study debts, "you do not need to provide loan information in your tax when lodging".
"If you have a loan when you lodge your tax return and your repayment income is above the minimum repayment income, we will work out your compulsory payment," the spokeswoman said.
"We anticipate many taxpayers will be required to make a compulsory repayment when they lodge their 2019-20 tax return following the repayment changes."
The new ATO figures also found of the $66.5 billion owed $7.9 billion was new debt accumulated last financial year and $1 billion was result of indexation applying to existing loans.
HELP liabilities are indexed annually on June 1 at same rate as the consumer price index.
This meant each loan debt rose by 1.8 per cent last month.
Repayment income Repayment rate
$45,881 - $63,092 1% to 3%
$63,093 - $79,652 3.5% to 5%
$79,653 - $100,560 5.5% to 7%
$100,561- $126,955 7.5% to 9%
$126,956 - above 9.5% - 10%