The financial cost of education

It's June now. Which means my university debt (HELP or HECS) just went up because of indexation.

Here is what indexation is:

"There is no interest charged on HELP debts.

However, indexation is added to your debt on 1 June each year.

Indexation is applied to your debt to maintain its real value by adjusting it in line with changes in the cost of living."

- Study Assist - Loan Indexation

This happens every year, however, this year the rate of increase was 7.1%. This is the highest it has ever been over the past 10 years. 

See: ATO Indexation Rates

Having done an undergraduate degree and a postgraduate degree my debt is obviously going to be higher than the majority of the population that only does an undergraduate degree and then finds a job. 

As much as I would love a free education like back in Whitlam's (1970's and 1980's) or like it is in some Scandinavian countries, I can accept that there are costs to getting an education and I am thankful that as an Australian citizen from a low socioeconomic background I am still able to go to university by getting a loan from the government. 

I can also accept to some degree that the longer it takes to pay off a loan the more it goes up. However, the amount it goes up by, specifically this year is quite ridiculous. 

Another thing I find unacceptable is when it is obligatory to make repayments. Currently you must start making repayments when you earn approximately only $5000* more than the minimum annual wage in Australia. To be fair, the less you earn the less percentage you have to pay off and vice versa, but I believe the minimum repayment income should be raised so people actually have a chance of not just getting out of debt, but also so they have a chance to invest in their future.

*This figure is APPROXIMATE

As a PhD student I earn below the minimum wage, despite being expected to work full-time hours, so I am currently not required to make payments to my loan. However, this year I made my first voluntary repayment. Not that it will reduce my debt, but rather keep it as it is.

**Yesterday my debt was 'y', I made a payment so my debt was 'x'. Today, after indexation is applied my new debt will be 'y' again. I can't afford to make a massive repayment, even the payment I did make is taking it straight out of my very limited savings. But if I did not make this repayment my debt would have increased to 'z'. 

**Where 'x' is the lower amount, followed by 'y', and 'z' is the highest amount.

I was debating with myself whether to make a repayment at all. Especially considering due to my disabilities and my carer responsibilities I may never earn enough to have to pay off my debt. However, I decided to be hopeful that one day I will be earning above the minimum wage and may even be in a position to apply for a home loan (with my partner, as a single income is rarely enough to buy any property these days). If I let my debt increase, I would not just have more to pay back in the future, but it would also affect any borrowing power I/we might have. 

Fingers crossed I made the best decision - that is being less well off now to be better off in the future.