Millions of Australians to have student debt slashed

Australians are set to have their debt wiped over the coming weeks under a massive move that aims to ease cost-of-living pressures. Here’s who will benefit.

Millions of Australians are set to have their student debt wiped by the end of the year under a pre-election pledge by the Albanese government.

Around 100,000 Australians received a text message over the weekend from the Australian Taxation Office, informing them their Higher Education Loan Program (HELP) debts have been reduced by 20 per cent.

Millions of Australians are set to benefit from pre-election pledge by the Albanese government to ease student debt. Picture: NCA NewsWire / David Geraghty

A further three million Australians will see their student debt slashed by $16 billion over the next fortnight.

Here’s how it will work and who will benefit.

WHAT DO AUSTRALIANS NEED TO DO?

Australians do not need to anything to claim the benefit, Education Minister Jason Clare said.

The benefit will be applied automatically before Christmas and will be backdated to June 1, 2025.

Australians will be informed by a text message or email from the ATO when the changes are automatically applied.

Education Minister Jason Clare has described the move as a “game-changer”. Picture: NewsWire / Martin Ollman

“They don’t have to do a thing, just wait for that ding, wait for that text message or email and then you’ll know that it’s happened,” Mr Clare said.

“The legislation will cut 20 per cent off your student debt and backdate it to 1 June, before indexation was applied.

“This is a game-changer for the more than three million Australians with a student loan.”

WHEN WILL AUSSIES SEE THE REDUCTION?

Australians can view their balance on the Australian Taxation Office (ATO) app or online service.

Some may not see the reduction until later this year, or early 2026.

The Albanese government introduced this measure to ease cost of living pressures and help Australians pay off their loans sooner.

The move is the biggest ever cut in student debt, the Albanese government says. Picture: NewsWire / Damian Shaw

HOW MUCH DEBT WILL BE CUT?

Under the policy, a graduate with an average student debt of $27,600 will see their loan reduced by $5520.

Mr Clare told Weekend Today it was the “biggest cut in student debt ever”.

“On average, that means about $5500 of debt wiped off their back.

“That’s a lot of help for young people, out of TAFE, just out of university, maybe they’re just out of home. They’re certainly just getting started in life.”

WHY HAS IT BEEN INTRODUCED?

The Albanese government introduced this measure to ease cost of living pressures and help Australians pay off their loans sooner.

Prime Minister Anthony Albanese says he will fight for every young Australian to have access to a good education. Picture: NewsWire / David Geraghty

WHO WILL BENEFIT ?

If the census date for a person’s study was on or before June 1, 2025, the government will reduce outstanding student debt by 20 per cent, the Department of Employment and Workplace Relations said.

As well as VET Student Loans the changes will apply to:

*HECS-HELP

*FEE-HELP

*STARTUP-HELP

*SA-HELP

*OS-HELP

*Australian Apprenticeship Support Loans

*Student Start-up Loan

*Student Financial Supplement Scheme

WHAT HAS THE PM SAID?

“I will always fight for every young Australian to have access to a good education,” Prime Minister Anthony Albanese said earlier this month. 

“This will help everyone with student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead.”

Originally published as Millions of Australians to have student debt slashed