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Henderson calls for HELP loan inflation guarantee to combat Labor’s student debt fiasco

After three years of crippling hikes in student debt under the Albanese government, young Australians deserve better protections and greater certainty when entering into a student loan.

That is why I am proposing an amendment to Labor’s student debt discount bill with a HELP (Higher Education Loan Program) loan inflation guarantee.

Anyone who takes out a HELP loan must not pay the price for Labor’s failure to control inflation.

Australians with a student loan or those planning to undertake tertiary studies should not be blindsided by high indexation driven by high inflation, as has occurred under Labor over the past three years.

That is why I am proposing that HELP indexation should be the lesser of the consumer price index or 3 per cent, delivering some three million Australians immediate cost of living relief and much needed certainty.

In contrast to Labor’s one-off 20 per cent discount which applies to current debtors only, capping HELP loans to 3 per cent, the upper band of the RBA’s inflation target, would be an ongoing measure delivering equity and certainty to all students into the future.

On 1 June 2025, student loans increased by another 3.2 per cent because Labor’s scheme is uncapped and provides no protection against the risk of ballooning indexation.

Since Labor was elected, even after changes to the way HELP indexation is calculated, student debt has increased by an alarming 14.3 per cent.* This is in contrast to the former Coalition government when annual indexation averaged just 1.7 per cent.

As higher education expert Professor Andrew Norton told a senate inquiry last year: ‘A flat maximum indexation rate also has the benefits of simplicity and reassurance.

While the Coalition should not oppose the 20 per cent student debt discount, let’s not forget this is a one-off sugar hit at a cost of $16 billion which does nothing for future students or to provide the certainty young Australians deserve.

Since it was elected, the Albanese government’s economic mismanagement has produced a student debt fiasco.

The Coalition needs to present credible policy alternatives to win back the trust and faith of Australians. It is imperative we fight for better outcomes every single day.   While my amendment will be considered through our usual party room processes, I appreciate the positive discussions I have had with colleagues on improving Labor’s bill in the national interest.

It is disappointing a HELP loan inflation guarantee was left on the cutting room floor in the lead up to the last election.

As I announced in February this year**, reviewing the Job-Ready Graduates program which has unfairly driven up the cost of some university degrees is also crucial.

In line with my commitment, I am proud to continue my fight for better education policies so that every young Australian can reach his or her best potential.

NOTES

*HELP Indexation rates: 1 June 2022 – 3.9%, 1 June 2023 – 3.2% (previously 7.1%); 1 June 2024 – 4% (previously 4.7%) and 1 June 2025 – 3.2%.

**See https://sarahhenderson.com.au/address-to-2025-universities-australia-solutions-summit/

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