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Aussies will have 20 per cent of their student debt wiped under a major new plan set to be announced by the Albanese Government.
The Prime Minister will unveil the proposal in Adelaide on Sunday, saying the government will ensure the education system is “fairer and affordable for every Australian”.
“I will always fight for every young Australian to have access to a good education,” Mr Albanese will say according to extracts of his speech.
“We’re already fixing indexation and today, we are going further by taking 20 per cent off student debt – for everyone with a student debt.”
About $16bn in student debt is expected to be cut from all student loan accounts that exist as of June next year.
This will mean average HELP debts of $27,600 will be slashed by about $5,520 next year.
The change will apply to all HELP, Vet Student Loans, Australian Apprenticeship Support Loans and other income-contingent student loans.
Mr Albanese said the move will help those with student debt “now” while the government works to “deliver a better deal for every student in the years ahead”.
“Our whole nation benefits when we make it easier for people to access education,” he said.
“This is about opening the doors of opportunity – and widening them.
“No matter where you live or how much your parents earn – we will work to ensure the doors of opportunity are open for you.”
Legislation for the commitment is set to be introduced next year.
The changes come after the government reformed the way study loans are indexed, backdated to June 1 2023, which will wipe $3 billion from student debts.
The major move comes just a day after the government pledged to raise the minimum repayment threshold for student loans.
Mr Albanese is expected to land in Adelaide this weekend for a campaign rally with South Australian Premier Peter Malinauskas.
Called “Building Australia’s Future”, Mr Albanese is set to lay out a plan to save average HELP debt holders some $680 in repayments per year at the rally.
The plan to make “the system better and fairer” would raise the minimum repayment threshold from around $54,000 in 2024-25 to $67,000 in 2025-26 and index it to keep it at 75 per cent of graduate earnings.
It would also shift repayments to a marginal repayment system in line with recommendations.
This means graduates would pay a percentage of all income above a threshold amount rather a percentage of total income after a threshold is hit.
A graduate earning $70,000 annually would have their minimum repayments cut by $1300, while a graduate earning $80,000 would get a cut of $850.
The relief would applied to graduates earning up to $180,000 per year.
Anyone earning above that would continue paying a flat 10 per cent rate.