Albanese govt's student debt cuts for 3 million people begin now

Three million Australians will receive a major cost-of-living boost over the next three weeks, as the Albanese government’s $16bn initiative to slash student debt takes effect.

Millions will receive a significant financial boost from Saturday, as the Albanese government’s election promise to slash student debt comes into effect.

News Corp can reveal the Australian Taxation Office (ATO) will start contacting Australians on Saturday to let them know their debt has been cut by 20 per cent, with 3 million people set to be notified over the coming three weeks.

The $16 billion initiative – which was passed by the Senate in July – covers HELP loans, Vocational Education and Training (VET) Student Loans, Australian Apprenticeship Support Loans, Student Startup Loans, and other loans.

It also raises the minimum amount before Australians have to start making repayments on their debt, from $54,435 to $67,000.

Education Minister Jason Clare said the move was “a big deal” for young people struggling with the cost of living.

“We promised it, Australia voted for it, and now it’s happening”, Mr Clare said.

“Three million young Australians are about to see it and to feel it and to hear it.

“They’ll get a ding on their phone letting them know their debt’s been cut … another one and a half million will get that message next week and another one and a half million the week after.”

“This is a big deal for a lot of young Australians. Just out of uni, just out of TAFE, just out of home, just getting started. It will take a big weight off their back.”

Federal Education Minister Jason Clare says debt will be cut from the accounts of 3 million Australians. Picture Glenn Hampson

Under the government’s policy, which is backdated to June 1 this year, an Australian carrying the average student debt of $27,600 will have approximately $5520 wiped from that debt.

For Dirk Hoare, a 23-year-old studying business at the University of Adelaide, the policy will see his debt of $46,000 reduced by around $9000.

Mr Hoare, who works full-time alongside his studies, told News Corp the debt relief would help him save for his first home.

“It’s a huge relief, especially with working and studying full-time. It’s just one less thing to worry about”, he said.

“My sister and I were talking about buying a place one day. That idea comes a bit easier now that our student debt is being cut.”

After successful testing on a small number of accounts this week, the ATO will start contacting Australians via text, email, or a message to their MyGov inbox.

Australians do not have to apply to receive the debt reduction; it will happen automatically.

Originally published as Albanese govt's student debt cuts for 3 million people begin now