Labor has introduced a bill in parliament today that will see a 20% reduction to student debt for over 3 million Australians. The new legislation will apply the reduction to all student loan schemes based on the amount owing as of the 1st of June 2025. This will cover the majority of government supported student loans including HECS-HELP, VET and apprenticeship support loans.
The bill also introduces changes to how student debts are repaid, raising the income threshold for mandatory repayments from $54,135 to $67,000.
While the new system will result in people repaying less annually, it overwhelmingly benefits new graduates who have not yet made any major contributions toward their debt over earlier or current students.
There are also concerns that the bill fails to consider how indexation on these loans is keeping graduates stuck in a ‘cycle of debt’ if they are consistently repaying less than the amount indexed on their overall balance.
Image: Image: Shutterstock – maybeiii
Produced By: Maeve Groom
Featured In Story: Andrew Norton – Professor of Higher Education Policy at Monash University, and Ashlyn Horton – President of National Union of Students
First aired on The Wire, Wednesday 23 July 2025