Anthony Albanese’s government will cut 20 per cent off all student loan debts, wiping around $16billion for about three million Australians.
The policy – central to Albanese’s re-election campaign – is now set to be implemented from June this year.
Under the plan, a graduate with an average student debt of $27,600 will see their loan reduced by $5,520, according to government figures.
Albanese’s proposed reform would apply to all Higher Education Loan Program, Vet Student Loans, Australian Apprenticeship Support Loans and other income-contingent student loans.
‘Our whole nation benefits when we make it easier for people to access education. This is about opening the doors of opportunity – and widening them,’ he said when announcing the plan.
The reforms would also raise the threshold for repayment from $54,000 to $67,000 and lower the rate to be repaid.
For someone on an income of $70,000, this will mean they will pay around $1,300 less per year in repayments.
Education minister Jason Clare said the cuts to student loans will be the first piece of legislation that Labor introduces when Parliament returns on July 22.
How much your student debt will be wiped by is revealed in the table above
Anthony Albanese’s government will reduce student loan debt by 20 per cent
‘The legislation will cut 20 per cent off your student debt and backdate it to 1 June, before indexation was applied,’ Clare said.
‘This is a game-changer for the more than three million Australians with a student loan.’
The gap between the newly discounted repayments, and what tertiary institutions charged the students, will be funded by taxpayers and government borrowing.
This builds on a $3billion policy introduced last year, which links student debt indexation to the lower of the wage price index or the consumer price index.
Without it, graduates could have faced another steep increase, like in 2023, when indexation soared to 7.1 per cent – up from 3.9 per cent the year before – adding $1,759 to the average student debt of $24,770.
