In February last year, when introducing legislation to change HELP repayment thresholds and rates, along with other HELP reforms, the government said that:
The fiscal challenge for the government is that HELP repayments have not kept pace with HELP lending growth. From 2010-11 to 2016-17, the level of new debt not expected to be repaid increased from 16 per cent to 25 per cent.
But unfortunately there is a disconnect between the stated purpose of the legislation and its likely effects. The thresholds and rate changes are unlikely to reduce doubtful debt , and indeed may increase it. Using ATO tax data, at the Grattan blog Will Mackey estimates that the new HELP repayment thresholds will produce slightly lower total annual student debt repayment than the previous thresholds.
The reason is that although some low and high income earners will repay more each year, most of the more numerous middle-income earners will repay less, producing a total repayment estimate of about $50 million a year less than if the previous thresholds and rates had been retained.