Every student will have their debt cut by 20 per cent at a cost to the budget of $16 billion, under a plan to be taken to next year’s federal election by the Albanese government.

In major step-up of an attempted political reset by the embattled government, the measure – which is the third so far announced by Labor to lessen the burden of student debt – will especially target younger voters who may have been lured by the Greens.