Meanwhile across the Pacific, the Australian government has released a package to reduce student debt by 20 percent. This increase will go some way towards relieving cost-of-living pressures for millions of Australians. This is an across the board reduction to all Higher Education Loan Program (HELP) debts, including university loans often known as HECS. The enormous reduction will apply only to debts that are outstanding on June 1, 2025. This decision will impact some three million Australians.
The third announcement we are making, to address the cost-of-living pressures that is being felt right across the country. They are particularly intent on serving younger citizens. The full debt relief will be backdated to balances on June 1, 2025, prior to the application of any indexation. The government expects this one-off reduction to clear around $16 billion of student debt.
At least 70 percent of the stock of student debt is owed by Australians aged 35 or under. For borrowers with a typical debt balance of $27,600, this cut means a loss of nearly $5,520. The administration has proposed to finalize this cut by the middle of December. This fix will ensure that the majority of borrowers will start seeing a difference in their balances soon after.
This debt relief follows the administration’s announcement that it would cancel an estimated $3 billion related to the indexation of student loans. This indexation used to be calculated on the lesser of the wage price index or the consumer price index. Education Minister Jason Clare said the move was part of implementing the government’s election promises to address the growing issue of student debt.
“We promised we would cut your student debt by 20 per cent and we are delivering,” – Education Minister Jason Clare
Australians can go on the myGov website and after a few clicks, see their loan balance. First, they have to connect their commercial platforms to the Australian Taxation Office’s online services. People who have paid their loans off already will not be eligible for this forgiveness. If they don’t reach a zero balance by June 1, 2025, they become ineligible.
“This cut is already locked in to people’s balances at 1 June but soon they will be able to see it and feel it,” – Education Minister Jason Clare
Australians can check their loan balances through the myGov website after linking their account to the Australian Taxation Office’s online services. However, individuals who have already repaid their loans and do not hold a balance as of June 1, 2025, will not be eligible for this reduction.
