More than three million Australians will have their student debt reduced by 20 per cent by the end of next week, with almost $16 billion to be wiped in total.
The Albanese Government said more than 1.5 million people would see their debts cut today as the Australian Taxation Office continues rolling out the one-off reduction.
The cut applies across a range of Commonwealth student loans, including HELP, VET Student Loans, Australian Apprenticeship Support Loans and Student Startup Loans, and will be backdated to June 1, 2025, before the last indexation.
For someone with the average HELP debt of $27,600, the reduction would wipe about $5,520.
Australians do not need to take any action, with the debt cut to be applied automatically.
The government has also lifted the minimum income threshold before repayments begin from $54,435 to $67,000, and reduced minimum repayment rates.
For a person earning $70,000, the changes are expected to reduce minimum repayments by about $1,300 a year.
Prime Minister Anthony Albanese said the measure would provide cost-of-living relief and ease the long-term burden of student debt.
“Getting an education shouldn’t mean a lifetime of debt,” he said.
Education Minister Jason Clare said it was the biggest cut to student debt in Australia’s history.
Skills and Training Minister Andrew Giles said the change would support students and apprentices to pursue qualifications, while Assistant Treasurer Daniel Mulino said it would make a difference as young Australians started their working lives.
