Australia

Australia: Albanese Government Wipes $10B Off Student Loans

Published JUL 31 2025

Story

Above: Australian Prime Minister Anthony Albanese at Wesley Church on July 22, 2025, in Canberra. Image credit: Hilary Wardhaugh/Getty Images

The Facts

Australia's parliament passed legislation cutting all student debts by 20%, wiping more than AU$16 billion ($10 billion) in debt for 3 million people as the first act of the re-elected Albanese Labor government.
Prime Minister of Australia
RNZ
The Senate passed the HECS debt bill 36-3 on Thursday morning, supported by crossbenchers David Pocock, Fatima Payman, and Tammy Tyrrell, who voted with the government and the Greens.
News.com.au
SBS News
The debt reduction applies to all Higher Education Loan Program loans, VET Student Loans, Australian Apprenticeship Support Loans and other student loans, effective June 1.
Department of Education
Prime Minister of Australia
According to the government, an individual with an average student debt of AU$27,600 will have AU$5,520 wiped from their outstanding loans. The Australian Taxation Office will reportedly process cuts by the end of the year.
Prime Minister of Australia
SBS News
Additionally, a person earning AU$70,000 annually will see their minimum repayments reduced by AU$1,300 per year under the change.
Ministers' Media Centre
Prime Minister of Australia
Under the bill, the repayment threshold will increase from AU$54,435 to AU$67,000, meaning graduates can earn more before mandatory repayments begin under a new marginal repayment system.
Department of Education
SBS News

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Pro-government narrative

This debt relief delivers crucial cost-of-living support when young Australians need it most. The 20% cut provides immediate financial breathing room for graduates struggling with housing costs and living expenses. Combined with higher repayment thresholds, this reform makes education accessible without creating lifetime debt burdens.

Prime Minister of Australia

APH

RNZ

Government-critical narrative

This AU$16 billion could be used to address more pressing education issues, such as scrapping the failed Job-ready Graduates program or extending paid placements to medical students. The money would better serve disadvantaged students through needs-based funding rather than blanket debt forgiveness.

SBS News