Labor's 20 per cent student debt cut delivers only 7.9 per cent real reduction, parliamentary analysis finds
The research, released by the Australian Greens on Monday, showed the $16 billion student debt relief package has been eroded by three years of indexation.
High inflation over the first term of the Albanese government caused student debts to balloon as they were indexed each financial year.
According to the analysis, students owing $30,000 in loans when Labor came to power will see their debt cut to $27,619 after indexation and the 20 per cent cut are applied.
That is just $2,381 in relief, or a 7.9 per cent reduction on their original balance.
Despite the government's changes to indexation, the compounding impact of annual increases has significantly diluted the long-term benefit of the one-off policy.
The policy drew widespread criticism when it was announced for its high cost and perceived unfairness, particularly for taxpayers without student debt.
The total cost of the policy was earmarked at $16 billion, providing assistance to just three million people, while 24 million Australians without HELP debt receive nothing.
Concerns over fairness also intensified after Sky News revealed that nearly 40,000 overseas-based debtors will receive close to $50 million in taxpayer-funded relief.
The students that were most reckless with their loans also stand to benefit the most, with some individuals racking up hundreds of thousands in debt.
Not-for-profit research body e61 Institute recently exposed the way the policy will unfairly benefit students who graduated in 2024.
University students who finished their degrees in 2024 will receive twice as much relief as people who left in 2020, according to e61.
'Most HELP debt is held by university graduates, who have much higher lifetime incomes than the average taxpayer,' e61 Research Economist Matthew Maltman said.
'And even if you look within graduates, those with more costly degrees tend to go on to earn higher incomes in the future.
'The current policy isn't at all targeted and that means it's going to give a very large amount of debt relief to future lawyers, dentists and doctors.'
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