Australians who will benefit the most from Anthony Albanese’s student debt reduction policy

Doctors who studied under full-fee places for their medicine degrees may have about $35,000 of their debt slashed, with about $16bn in debt to be wiped under the Labor plan.

Students and graduates with large debts are set to benefit the most from Anthony Albanese’s pre-election promise. Picture: Jeremy Piper/NewsWire

Law and MBA graduates who have recently completed full-fee postgraduate university degrees may have up to $24,000 wiped from their student debts under Anthony Albanese’s pre-election promise.

Doctors who studied under full-fee places for their medicine degrees may have about $35,000 of their debt slashed under the ­proposal to wipe 20 per cent off all student loan debts from June 1 next year.

Under a re-elected Albanese government, about $16bn in student debt would be wiped for about three million Australians, the government said.

The proposed change would apply to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other income-contingent student support loans held on June 1, 2025.

Andrew Norton, a higher education policy professor at ANU, said higher education students who had taken out large FEE-HELP loans of more than $100,000 for full-fee-paying places stood to benefit the most from the proposal.

Professor Norton said FEE-HELP loans covered full-fee-paying places for some “domestic postgraduate students” at public universities and “all domestic students” in private universities.

FEE-HELP loans differ from HECS-HELP which are loans for student contributions at prices set by the government for those who obtain a commonwealth-supported place in a course.

“Obviously a 20 per cent cut to total debt benefits the people who owe the most money,” he said.

“Of course, you still owe the other 80 per cent, it’s still a lot of money for some of these people, but they will benefit the most.”

In 2024, the HELP loan limit for most students was $121,844, but for students studying certain medicine, dentistry, veterinary science and aviation courses, the limit was $174,998.

Those who will benefit the most are those who have reached their loan limits, and who may save about $24,000 and $35,000 respectively.

This will include people who paid full fees for their medicine degrees, as well some domestic students who have paid for full fee Juris Doctor degrees and MBAs, which can cost more than $100,000 and require students to already hold an undergraduate ­degree.

Professor Norton said the policy would also favour recent graduates who hadn’t made many repayments, compared to those who graduated 10 years ago and were close to paying down their debt.

“While they will get a 20 per cent cut, that may not be very much money, because their balance is now fairly low,” he said.

“It is going to have these sort of semi-arbitrary effects, because where you are in the repayment cycle has a big impact. All the people who have made huge voluntary repayments over the last two years might say … I’ve lost 20 per cent, I’ve paid too much.”

Under the proposal, 276,000 people with an outstanding HELP debt of more than $60,000 will have their debts wiped by at least $12,000, while 147,500 Australians with a debt of between $50,000 to $60,000 will have between $10,000 to $12,000 slashed.

Those 250,000 people with debts of between $40,000 and $50,000 will save between $8000 and $10,000 and the 380,000 with loans of $30,000 to $40,000 will have a $6000 to $8000 reduction.

The 501,000 people with debts of $20,000 to $30,000 stand to save between $4000 and $6000, and 585,000 people with loans of between $10,000 and $20,000 will have their debts wiped by $2000 to $4000. The 791,000 people with less than $10,000 of debt will save less than $2000.