Red flags were raised when total student debt hit $60 billion, but attempts to rein it in have backfired.
Average annual repayments are now lower than before the policy change.
While the changes meant that an additional 200,000 had to start repaying their Higher Education Loans Program earlier, the design of the policy was so flawed that most graduates repaid less than before, according to higher education policy expert Andrew Norton from the Australian National University.
Mr Norton said a massive hike in outstanding debt in the past decade was a result of Rudd-Gillard era policies that sought to increase the proportion of young people with aMr Norton said that most of the graduates from the early influx of new students between 2012-15 were now in the workforce, bringing the total number of people who were actively repaying their debts to over 1 million for the first time in 2019.
“This will become a bigger political issue as the amount of student debt has accelerated during a period in which inflation was very low,” Mr Norton said.“So the annual amount that is indexed to inflation, along with the total number of people who have a HELP debt, both increase, that has political consequences.”