Billions to be slashed from student debts, as Labor’s key election promise passes parliament

Aussies with student debt will have thousands of dollars taken off their bill, with Labor passing one of its key election promises to young voters.

Australians with a student debt are set to have their loans slashed by 20 per cent by the end of the year, with Education Minister Jason Clare confirming people will receive a text message once the process is complete.

Labor’s signature election policy passed the Senate on Thursday, with more than 3 million Australians set to get an average debt reduction of $5520 on an average loan of $27,600.

The debts will be reduced automatically by the Australian Taxation Office, with the process set to be completed by the end of the year.

The discount will be backdated to the amount owed on June 1, 2025.

However Anthony Albanese took aim at the Coalition for not fronting up to the crucial vote in the Senate, after they panned the cost-of-living measure when it was introduced in November, ahead of the election.

Education Minister Jason Clare confirmed Aussies would receive a text once the ATO has applied the 20 per cent discount. Picture: NewsWire/ Martin Ollman

Opposition benches were notably empty as the Bill passed parliament on Thursday morning, with Labor, Greens and crossbench senators, David Pocock, Tammy Tyrell, and Fatima Payman voting for the Bill.

One Nation senators Malcolm Roberts, Warwick Stacey and Tyron Whitten voted against.

“They said it was unfair, they said it was not an equity position to take forward, and they said it was advantaging university students and it applies to TAFE as well,” the Prime Minister during Question Time.

“Today, in the Senate, none of them it could even walk into the chamber to vote for this change.”

Speaking to reporters, Mr Clare said the HELP discount was an important promise to “young Australians” who “don’t always see something for them on the ballot paper”.

However he urged patience with the ATO now required to “write about 50,000 lines of code to implement” the policy and told MPs in question time that Aussies will “get a text message when it is done”.

“But this is now going to happen. It’s guaranteed and it will be backdated to 1 June this year, before indexation happened,” he said.

“We’re doing that for a reason – to make sure that we honour the promise we made to the Australian people in full, that we would cut their student debt by 20 per cent and today the parliament has acted and I’m glad to see that they have.”

The Bill also contained measures which will increase the minimum income repayment threshold before Australians begin to pay back their student loans from $54,000 to $67,000.

Rates of repayments will also be lowered.

Labor’s promise to slash thousands from students debts has passed parliament. Picture: NewsWire / Nicholas Eagar

The Opposition’s no-show was also highlighted by Greens senator Sarah Hanson-Young.

“I’d just like to draw attention to the state of the Opposition benches in the last 15 minutes. They seem to be invisible, missing,” said Senator Hanson-Young before she was cut off by Senate President Sue Lines.

Senator Lines admonished Senator Hanson-Young for the interruption, saying: “This is not a time for a statement. It’s not appropriate for a quorum because there are senators in here and the practice in this place is that we don’t comment on whether senators are in the chamber or not”.

On Thursday, the Senate also passed Labor’s strengthened childcare safety reforms after Victorian childcare worker Joshua Brown was hit with more than 70 child abuse charges in July.

Mr Clare thanked Sussan Ley for the bipartisan support on the Bill, and said “this is a different Parliament and a different Opposition Leader”.

“Australians, I think, want us to work together on the big things that matter to help Australians, and particularly on the childcare matter where it could have been very different,” he said.

“The decision of Susan and Jonno (Duniam), the Shadow Minister, to work constructively with us, I take my hat off to them. This is what Australians want of us.”

Originally published as Billions to be slashed from student debts, as Labor’s key election promise passes parliament