On 29 July, the Australian Bureau of Statistics announced that the Consumer Price Index (CPI) fell 1.9 per cent in the June 2020 quarter, the largest fall in its 72-year history.
For people with an outstanding Higher Education Loan Program (HELP) or similar student loan debt, indexed using CPI, this raises questions about whether the debt will be reduced in line with the CPI reduction.
While there is no immediate effect from the June 2020 quarter fall, the indexation arrangements for outstanding HELP debts, which are intended to maintain the real value of the debt, could result in reduced loan balances in June 2021, depending on CPI movements over the next three quarters.
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