Millions of Australians could see thousands wiped from their student loans as the federal government prepares to introduce its long-promised Hecs relief bill to Parliament this week.
If passed, the legislation will slash 20 per cent off all outstanding Hecs-help debts, affecting about three million people and cutting a total of $16 billion from the national student loan bill.
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The cut will apply to all debts held on 1 June 2023, just before this year’s indexation kicked in.
It means someone with an average debt of around $27,600 will have more than $5,500 wiped from their balance.
The minimum repayment threshold will also rise from $54,000 to $67,000, meaning lower- and middle-income earners won’t have to start paying back their loans as early.
The government says that could save some graduates around $1,300 a year.
Education Minister Jason Clare said the changes would “take weight off the shoulders” of young Australians trying to move out of home or save for a mortgage.
“It’ll take a lot of weight off the shoulders of a lot of young Australians who are just out of uni … looking to move out of home or save up to get a mortgage,” Clare said.
“You don’t start paying off your university degree until your degree starts to pay off for you.”
The move is part of Labor’s broader push to offer cost-of-living relief, especially to young people.
If approved, the cut will be applied automatically through the ATO, with no need for students to apply.
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