HECS-HELP question

[badfish77]

I hope this subject is allowed…
My question is when indexation is applied to these HECS/HELP debts to represent the actual value of the debt with regard to inflation(?), could indexation somewhere along the line lower the total dollar amount to be repaid?

e.g. If indexation was something like 2.5% in 2021 and is 7.1% in 2023 is it possible it could go down to 5.5% in 2025? Not likely I know - but possible?

Or is that not at all how it works?

 

[resjudicata]

@badfish77 indexation is based on the CPI. when CPI goes down, so too will the indexation of HECS

 

[badfish77]

@resjudicata Thank you for being the bearer of good news.

 

[somethingon]

@resjudicata The chance of CPI falling is pretty low, I doubt we'll see deflation in near or medium term. Inflation will likely fall though.

 

[animator911]

@somethingon China would like to have a word with you

 

[somethingon]

@animator911 True, as might Japan from the past, but I still doubt it here. It would be interesting to see if the many rules around indexation actually work in reverse though .

 

[simplewoodencross]

@badfish77 If we faced deflation of 5.5% in 2035, we would be in a lot of trouble. It is just not going to happen unless there is a severe depression