Australia wipes $10 billion in student debt to ease cost of living
Australia's parliament has passed a landmark law slashing student loan debt by 20%, delivering over A$16 billion (US$10.31 billion) in relief to around three million Australians. The legislation, passed on Thursday, marks the first major policy enacted by Prime Minister Anthony Albanese's center-left Labor government since its re-election in May.
Albanese said in a statement that the move fulfills a key election promise aimed at easing the cost of living burden. “We promised cutting student debt would be the first thing we did back in parliament – and that’s exactly what we've done,” he said. “Getting an education shouldn't mean a lifetime of debt,” News.Az reports, citing Reuters.
Education Minister Jason Clare described the measure as a step toward lightening the financial load on younger generations. Speaking at a press conference, he emphasized that younger voters turned out in large numbers for this cause and are now seeing results. Millennials and Gen Z, who made up 43% of Australia's 18 million registered voters, played a crucial role in shaping the outcome of the May election.
The government framed the debt reduction as both a cost-of-living measure and an effort to tackle intergenerational inequality. According to official estimates, the 20% reduction equates to wiping A$5,520 from the average university loan of A$27,600. The change will be applied retroactively from June 1, 2025, before the loans were indexed by 3.2% due to inflation.
In addition to the debt cut, the new law raises the minimum repayment income threshold from A$54,435 to A$67,000, easing the repayment burden for low-income graduates.
The Albanese government’s move is being seen as a direct appeal to younger voters struggling with rising living costs and stagnant wages, and a signal of its intention to prioritize social equity in the current term.
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