The Labor government will introduce legislation promising to shave 20% off all student debt.
The legislation is set to wipe A$16 billion in student debt for around three million Australians and will target HELP debt, VET loans and apprenticeship loans.
According to calculations, those with average HELP debt of A$27,600 will have A$5,520 wiped from their outstanding loans and those at the upper end, with debt exceeding A$60,000, could see a reduction of more than A$12,000.
The legislation will also see the minimum employment threshold rise from A$54,000 to A$67,000, meaning low-income earners will not have to start paying back their debt.
Education Minister Jason Clare says the changes are aimed at taking the weight off the shoulders of recent graduates.
“You don’t start paying off your university degree until your degree starts to pay off for you,” he said.
While the Coalition was in favour of the legislation change, the Greens have spoken out against the change.
“Since the Labor government was elected, an increase in student debt because of indexation means that the promise of a 20% reduction effectively shrinks to just 7.9%,” Greens higher education spokesperson Senator Mahreen Faruqi said.
“In opposition, Labor spoke a big game against the Morrison Government’s fee hikes for degrees like arts, business and law. In Government, they’ve shown their true colours, smashing students with $50,000 arts degrees that grow every year and take a lifetime to pay off.”
Leading economic think tank, the e61 Institute, said student loans being cut by as much as A$5,5000 would be a fairer and more effective way of providing relief than the government’s plan.
