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University student debt will be reduced by 20 percent.
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One of Anthony Albanese’s campaign pledges was this commitment.
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Anthony Albanese
The government plans to reduce all student loan debts by 20 percent, eliminating approximately $16 billion in student debt for about three million Australians.
The policy, which is crucial to Mr Albanese’s re-election campaign, is scheduled for implementation following his electoral win in June of this year.
As per the proposal, a graduate carrying an average student debt of $27,600 would have their loan decreased by $5,520, based on governmental statistics.
Mr Albanese’s suggested change would cover all Higher Education Loan Program loans, Vocational Education and Training Student Loans, Australian Apprentice Support Loans, and other forms of income-contingent student debt.
‘The entire country prospers when we simplify educational accessibility for everyone. It’s all about unlocking opportunities – and making those pathways broader,” he stated earlier upon unveiling the initiative.’
The proposed changes would increase the income level at which repayments begin from $54,000 to $67,000 and reduce the percentage of income that needs to be paid back.
For an individual earning $70,000, this change would result in savings of approximately $1,300 annually in repayment costs.
Education Minister Jason Clare stated that the reduction in student loan benefits will be the initial bill that Labor plans to present once Parliament reconvenes on July 22.
“The new law will reduce your student debt by 20 percent and apply this retroactively from June 1st, prior to the indexing adjustment,” Clare stated.
This is a groundbreaking development for over three million Australians burdened with student loans.
This expands upon a $3 billion policy implemented last year, where student debt indexing is tied to whichever is lower: the wage price index or the consumer price index.
Without it, graduates could have faced another steep increase, like in 2023, when indexation soared to 7.1 per cent – up from 3.9 per cent the year before – adding $1,759 to the average student debt of $24,770.
Mr Dutton had pledged to eliminate Labor’s student debt relief policy if the Coalition had emerged victorious from the election, contending that it was unjust for tradespeople who did not attend university.
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