Cutting student debt

for more than three million Australians

The Federal Labor Government next week is cutting the student debt of more than three million Australians in this month’s Budget, including more than 30,000 across the Central Coast.

8 May 2024

 

THE Budget next week will be focused on easing cost-of-living pressures while continuing the fight against inflation, at the same time as we lay foundations for future growth.

 

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 Central Coast students and those with a student debt 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.

 

Minister for Education Jason Clare said “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.”

 

In response to the Australian Universities Accord, the Government will cap the HELP indexation rate to 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 every person on the Central Coast with a HELP debt, addressing 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.

 

Minister for Skills and Training Brendan O’Connor said “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.”

 

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.

 

Federal Member for Robertson, Dr Gordon Reid said “The Federal Labor Government is cutting student debt for 15,470 people in Robertson and 15,404 in Dobell.

 

“I’ve heard from students and people with student loan debt who were shocked at last year’s spike in indexation. This Government has listened to you and now, we’re taking action.

 

“This will make the system fairer and benefit all Australians with a HELP debt.”

 

Federal Member for Dobell, the Hon. Emma McBride said “Our government understands that, like others across the Coast, students are doing it tough with cost-of-living pressures.

 

“By wiping $3 billion in student debt, including for more than 30,000 students on the Coast, we are helping to take pressure off local students and workers.”

 

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

 

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