Huge change coming to Aussies with HECS debts with $16billion set to be cut from student loans
Aussies will have 20 percent of their student debt forgiven under a massive new plan to be announced by the Albanian government.
The Prime Minister will unveil the proposal in Adelaide on Sunday, saying the government will ensure the education system is “fairer and more affordable for every Australian”.
“I will always fight to ensure that every young Australian has access to a good education,” Mr Albanese will say, according to excerpts from his speech.
‘We are already working on determining indexation and today we are going even further by offering a 20 percent discount on student debt – for everyone with student debt.’
It is expected that starting next June, approximately $16 billion in student debt will be deducted from all outstanding student loan bills.
This means that the average HELP debt of $27,600 will be reduced by about $5,520 next year.
The change will apply to all HELP, vet student loans, Australian Apprenticeship Support Loans and other income-tested student loans.
Mr Albanese said the move will help people with student debt “now” as the government works to “deliver a better deal for every student in the coming years”.
Aussies will have 20 percent of their student debt forgiven under a major new plan to be announced by the Albanian government (pictured are students from the University of NSW)
“Our entire country benefits when we make it easier for people to access education,” he said.
‘This is about opening opportunities and broadening them.
‘No matter where you live or how much your parents earn, we will do everything we can to ensure the doors of opportunity are open to you.’
Legislation for the commitment will be introduced next year.
The changes come after the government reformed the way student loans are indexed, retroactive to June 1, 2023, which will wipe out $3 billion in student debt.
The big move comes just a day after the government promised to raise the minimum repayment threshold for student loans.
Albanese is expected to land in Adelaide this weekend for a campaign rally with South Australian Prime Minister Peter Malinauskas.
Titled ‘Building Australia’s Future’, Mr Albanese will lay out a plan to save average HELP debt holders around $680 in repayments per year during the rally.
Anthony Albanese is set to announce that starting next June, $16 billion in student debt will be deducted from all existing student loan bills.
The plan to “make the system better and fairer” would increase the minimum repayment threshold from about $54,000 in 2024-25 to $67,000 in 2025-26 and index it to keep it at 75 percent of graduates’ income.
It would also shift reimbursements to a marginal reimbursement system, in line with the recommendations.
This means that graduates would pay a percentage of all earnings above a threshold amount, rather than a percentage of total income after a threshold is reached.
For a graduate earning €70,000 annually, the minimum repayment will be reduced by €1,300, while for a graduate earning €80,000, a reduction of €850 will be imposed.
The exemption would apply to graduates earning up to $180,000 per year.
Anyone earning above that will continue to pay a flat rate of 10 percent.