Albanese government to reduce student debts under new plan

Millions of Australians will have their student debts reduced under an Albanese government plan to deliver financial relief.

Under a cost of living pitch, the federal government is set to announce it will take 20 per cent off student debts for every Australian with a student debt.

This will include all HELP, Vet Student Loan, Australian Apprenticeship Support Loan and other income-contingent student loans.

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Prime Minister Anthony Albanese is set to detail the plan as he joins South Australian Premier Peter Malinauskas for a campaign rally in Adelaide tomorrow.

The government estimates the plan will cut about $16 billion in debt on accounts that exist on June 1 next year.

A university graduate with the average HELP debt of $27,600 will see around $5520 wiped from their outstanding HELP loans next year.

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The government said this builds on their reforms to fix the indexation formula, announced in the 2024-2025 Federal Budget which wipes around $3 billion in student debt.

"It means that all up, the Albanese Government will cut close to $20 billion in student loan debt for more than three million Australians," the Prime Minister's office said in a statement.

"The government will introduce legislation which will give effect to this commitment next year."

The education minister announced on Saturday the Albanese Government will raise the minimum repayment threshold for student loans and cut repayment rates to make the system fairer for all Australians with student debt.

"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," Albanese said.

"This will help everyone with a student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead."

Cost of living pressures are at the forefront for many young voters ahead of next year's federal election.

People under 35 have been hit the hardest by multiple interest rate and rent rises, according to Commonwealth Bank data released in August, which has seen their savings go backyards.

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