Students are celebrating the Australian Government’s decision to slash HELP loan debts by 20 per cent, as confirmed in the 2025 Federal Budget.
As a part of increasing cost-of-living crisis measures, students will see their university and TAFE fees through the government’s Higher Education Loan Program (HELP) reduced.
According to Treasurer Jim Chalmers combining this milestone with the Labor Party’s current student debt relief scheme, more than three million Australians will be affected by the landmark change.
“We will slash $19 billion dollars of debt,” Mr Chalmers said.
In a joint statement from the Education Minister Jason Clare, along with Prime Minister Anthony Albanese, Skills and Training Minister Andrew Giles and Social Services Minister Amanda Rishworth announced that the changes to the repayment threshold for student debt would give “significant and immediate cost of living relief to Australians with student debt”.
In New South Wales the average student will have $5,703 wiped, the equal second highest cut with the ACT, behind Victorian students.
In addition to the 20 per cent cut, the Australian Government has altered the repayment income threshold for HELP loans. Currently set at $54,435, the new threshold with be raised to approximately $67,000 from July 1. This means that graduates will not need to begin repaying their HELP loans until they reach this income level, allowing many to focus on establishing their careers before facing student debt repayments.
SOURCE: Ministers for the Department of Social Services
The decision comes in response to growing concerns about the impact of student debt on young Australians, particularly as the cost of rent, groceries, and other essentials continues to rise.
UOW students and alumni have welcomed the change, with many expressing relief at the prospect of paying off their debts sooner and having greater financial flexibility early in their careers.
Social Science student Emma Klein has welcomed the decision.
“I think it’s really good. I think it going to have a really positive effect on lots of young people that are trying to pay off their loans,” Ms Klein said.
Despite celebrations for these changes, some fear that the reduction does not fully address concerns from previous year’s indexations. In 2023, HELP debts were indexed a record 7.1 per cent due to rapidly rising inflation (this was later capped at 3.2 per cent and students were refunded). In 2024, indexation was 4.7 per cent, and was again later capped at 4 per cent.
“Yes, I am concerned. Even though I haven’t been studying for that long, a lot of people I know have been. I think that a valuable step from the government next would be to address the inflation rates and indexations rates [affecting students],” Ms Klein said.
Despite this, for many students and graduates, these latest changes has veered in the right direction towards making tertiary level education more financially viable and accessible in Australia.
For more personalised information, students are encouraged to check their myGov accounts and the Australian Taxation Office website for updates.
Feature Image Source: Getty