Labor pledges major student debt overhaul in key election pitch

Australians lamenting burdensome student loans could get major relief under an overhaul being proposed by the Albanese government.

Labor is pledging major relief for Australians burdened by study loans if the Albanese government is re-elected next year.

Anthony Albanese will travel to Adelaide this weekend for a campaign rally with South Australian Premier Peter Malinauskas themed “Building Australia’s Future” on Sunday.

The Prime Minister will lay out a plan to save average HELP debt holders some $680 in repayments per year.

The plan to make “the system better and fairer” would raise the minimum repayment threshold from around $54,000 in 2024-25 to $67,000 in 2025-26 and index it to keep it at 75 per cent of graduate earnings.

It would also shift repayments to a marginal repayment system in line with recommendations.

This means graduates would pay a percentage of all income above a threshold amount rather a percentage of total income after a threshold is hit.

“This is what Labor governments do. We help people under pressure and we build for the future,” Mr Albanese will say on Sunday, according to extracts of his speech shared with NewsWire.

Prime Minister Anthony Albanese says the student overhaul would make ‘the system better and fairer’. Picture: NewsWire / Morgan Sette

“This will be the heart of the positive and ambitious agenda we take to the Australian people at the next election.

“Labor will always be the party of education. No matter where you live, no matter how much your parents earn, we will work to ensure the doors of opportunity are open for you.”

Under the plan, a graduate earning $70,000 annually would have their minimum repayments cut by $1300, while a graduate earning $80,000 would get a cut of $850.

The relief would applied to graduates earning up to $180,000 per year.

Anyone earning above that would continue paying a flat 10 per cent rate.

“We will make it easier for young Australians to save in the future, and we are going to make the system better and fairer as well,” Mr Albanese is expected to say.

“This is good for cost of living. Good for intergenerational fairness. Good for building Australia’s future.”

The latest announcement comes on top of legislation passed earlier this year to set HELP debt indexation at which is lower out of the of the Consumer Price Index (CPI) or the Wage Price Index (WPI).

The Albanese government introduced the legislation after student loan holders were hit with a shock 7.1 per cent hike last year because the CPI soared to historic highs.