Cutting student debt for more than three million Australians

The Albanese Government will cut the student debt of more than three million Australians in this month’s Budget.

Our Budget will be all about easing pressure on Australians and continuing the fight against inflation at the same time as we lay foundations for future growth in our economy.

This action taken will wipe around $3 billion in student debt – easing pressure on workers and students across the country.

It will provide significant relief for students while continuing to protect the integrity and value of the HELP and other student loans systems, which have massively expanded tertiary access for more Australians.

In response to the Australian Universities Accord, the Government will cap the HELP indexation rate to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June 2023.

The Government will backdate this relief to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on 1 June last year.

This will benefit all Australians with a HELP debt, fixing the issue of last year’s spike in the CPI indexation rate of 7.1 per cent and preventing growth in debt from outpacing wages in the future.

The 2023 indexation rate based on WPI would only have been 3.2 per cent.

An individual with an average HELP debt of $26,500 will see around $1,200 wiped from their outstanding HELP loans this year, pending the passage of legislation.

Estimated indexation credit for HELP debtors

HELP DEBT at 30 June 2023TOTAL ESTIMATED CREDIT FOR 2023 AND 2024*
$15,000$670
$25,000$1,120
$30,000$1,345
$35,000$1,570
$40,000$1,795
$45,000$2,020
$50,000$2,245
$60,000$2,690
$100,000$4,485
$130,000$5,835

*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and are subject to indexation on 1 June 2024 will receive an indexation credit.

Australians with a HELP debt can find out how much this is estimated to benefit them using the HELP Indexation Credit Estimator here.

This is part of the first stage of reforms the Albanese Government will implement in response to the Universities Accord.

Quotes attributable to Minister for Education Jason Clare:

“This will wipe out around $3 billion in student debt from more than three million Australians.

“The Universities Accord recommended indexing HELP loans to whatever is lower out of CPI and WPI.

“We are doing this, and going further. We will backdate this reform to last year. This will wipe out what happened last year and make sure it never happens again.”

Quotes attributable to Minister for Skills and Training Brendan O’Connor:

“This continues our work to ease cost of living pressures and reduce and remove financial barriers to education and training.

“VET Student Loans and Apprenticeship Support Loans support many Australians to get the skills they need for secure and rewarding careers, and these changes make sure that help is provided on a fairer basis.

“By backdating this reform to last year, we’re making sure that those with student loans affected by last year’s jump in indexation get this important cost-of-living relief.”

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