Billions of dollars of student debt have been wiped from the accounts of 100,000 Australians.
The Albanese government’s pre-election promise to ease student loan debt passed parliament in August and has begun to roll out from today.
About three million Australians will have a total of $16 billion of all student loans, including HELP, VET, apprenticeship support loans and student startup loans.
Education Minister Jason Clare said it was the “biggest cut in student debt ever”. (Nine)
The first 100,000 people will see their debt slashed from today, with another three million to follow in the next fortnight.
Australians will receive a text message or email from the Australian Tax Office when the changes are automatically applied.
Education Minister Jason Clare said it was the “biggest cut in student debt ever”.
“Today, 100,000 young Australians will get the best text message ever, telling them that their debts been cut by 20 per cent,” he told Weekend Today.
“On average, that means about $5500 of debt wiped off their back.
”That’s a lot of help for young people, out of TAFE, just out of university, maybe they’re just out of home. They’re certainly just getting started in life.”
The 20 per cent reduction will be calculated based on what the debt amount was on June 1, before indexation was applied.
“Sydney, Australia – August 17, 2012: Students and graduates converge on a lawn before the University of New South Wales (UNSW) library on a clear winter morning.” (Getty)
The legislation also raised the minimum amount people have to make to start repaying their loans from $54,435 to $67,000 and reduced the minimum repayments.
These changes are in addition to the $3 billion cut from the indexation applied to student loans earlier this year after the government switched the index rate to be whichever is lower: the wage price index or the consumer price index.
The federal government earlier this month announced it will introduce a second round of 20 per cent cuts to student loan debt, totalling another $16 billion, by June 1 next year.
“I will always fight for every young Australian to have access to a good education,” Prime Minister Anthony Albanese said in a statement at the time.
”This will help everyone with student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead.”
