Key Points
- The government has announced plans to eliminate $16 billion worth of student debt.
- Students with tertiary education debt would have 20 per cent of their loan debt wiped.
- The prime minister said the next election is about the next generation.
The Albanese government is promising to cut tertiary student and apprentice debts if it wins the next federal election, under a suite of new policies unveiled at the weekend.
Labor is pledging to cut a further 20 per cent off all student loan debts by 1 June 2025, which it says will wipe around $16 billion in student debt for around three million Australians.
Separately, it will also introduce legislation to establish 100,000 fee-free TAFE places from 2027, in addition to its announcement on .
Some of the policy changes will require legislation which the government plans to introduce early in 2025.
A new cohort of voters who have turned 18 — and started accruing higher-education debts — will vote at the next federal election expected by May.
They join debt-laden recent graduates trying to keep up with bills in a cost-of-living crisis and save for mortgage deposits for housing.
Student loans and other debts can also reduce the amount aspiring first-home buyers can borrow.
Prime Minister Anthony Albanese said the next election would be about cost of living pressures but also about “the next generation”.
He said if Labor wins the election, due to be held by the end of May, debt reductions will be the first piece of legislation it will bring before the federal parliament.
“This is about putting money back into your pocket and putting inter-generational equity back into the system,” Albanese said.
“It’s good for the cost of living, good for this generation and for generations to come.”
What does 20 per cent off loans mean?
According to modelling from the prime minister’s office, students with the average HECS debt of $27,600 would have more than $5,500 taken off their loans, helping an estimated three million people.
Students with under $10,000 in debt would have under $2,000 wiped, while students with over $60,000 in debt would have over $12,000 of debt wiped.
Greens senator Mehreen Faruqi said student debt holders would have already benefited under a bill proposed by her party to scrap indexation and increase repayment thresholds.
She called for the government’s proposed change to come before parliament sooner.
“After years of blocking us, Labor is finally starting to listen to the Greens about the need to address soaring student debt, but it’s a small step well below what is needed,” she said on Saturday.
Opposition frontbencher Simon Birmingham questioned where the money to fund the policies were coming from.
“This isn’t real reform, this doesn’t change the student fees that someone who starts university next year pays. This is simply a cash splash from Anthony Albanese,” he said.
Earlier, coalition education spokeswoman Sarah Henderson said students would take longer to repay debts under the proposed threshold changes.
The government’s previous modifications fixed the rate of debt indexation to inflation or wage growth, whichever was lower.
Aspiring teachers, nurses and social workers have also been offered commonwealth support to complete practical training.
The announcement comes as the prime minister tries to leave a few things behind him.
Albanese was forced to deny allegations he sought upgrades on Qantas flights from former chief executive Alan Joyce after revelations he had received 22 upgrades, including while he was transport minister in the Rudd-Gillard-Rudd governments.
The initial focus on Albanese has widened,
