The re-election of the ALP has secured university students and graduates across the country with a 20 per cent cut to all student debts.
The Labor campaign vowed to ease the financial burden incurred by the Higher Education Loan Program by increasing the repayment threshold and committing $16 billion to slash debts before the next indexation on June 1.
Prime Minister Anthony Albanese said that the measures will provide cost-of-living relief and increase accessibility to higher education.
“I will always fight for every young Australian to have access to a good education,” he said.
“My government will make sure our education system is fairer and affordable for every Australian and we won’t delay unwinding the damage caused by the former Coalition Government.”
Source: Australian Taxation Office
According to the latest Australian Taxation Office HELP statistics report, three million Australians have outstanding student debt, a number that has drastically grown over the past decades.
Source: Australian Taxation Office
Student HELP debt repayments generated just over $5 billion in revenue for the government last financial year, according to the ATO’s 2023-204 annual report.
In the same financial year, HELP debtors paid nearly $4 billion more in ATO net tax cash collections than the government raised from the Petroleum Resource Rent Tax (PRRT) on oil, gas and petroleum projects in Commonwealth waters.
Source: Australian Taxation Office
Whilst Labor’s changes will save those with the average HELP debt of $27,600 around $5,520, some debtors have claimed the system itself needs an overhaul.
Early childhood educator and university graduate Matilda Child said that her student debt has felt particularly frustrating.
“As a woman, I had to take time off work when having children and then returned to work part time for roughly five years,” Ms Child said.
“This meant I didn’t meet the threshold to make compulsory repayments on my HECS [Higher Education Contribution Scheme] and my debt increased more than it should have if I had been working.
“The whole thing feels a little unfair considering so many people in Parliament got their degrees for free.”
Ms Child’s student loan has grown by $4,485 through indexation since 2014 and she said the remaining $15,786 on her original $25,000 loan might take her another 10 years to pay off.
“I don’t see a future for myself where I will own property,” she said.
“Partly because of my student debt, as it would impact my application for loans, but also because of other contributing factors like being a single parent in a low paying job.
“There is currently a shortage of Early Childhood Teachers nationwide, a 20 per cent wipe would be appreciated but they should just wipe all HECS debt for teachers.”
Labor’s initiative will reduce balances across all HELP, Vet Student Loan, Australian Apprenticeship Support Loan and other income-contingent student support loan accounts.