'More money in your pocket... not the government's': Major change to HECS could help millions of Aussies save $1300 per year

Sky News AU

5 days ago

Millions of Australians struggling under the weight of rising living costs and mounting student debts will soon receive a much needed financial break, as the Albanese government rolls out sweeping changes to the HECS system.
In a major policy move, the Labor Government proposed 20 percent cuts off all existing HECS student debts, a change that will help millions of Australians struggling to pay their student debts.
This legislation was introduced by the Federal Minister for Education, Jason Clare and is considered to be the first bill introduced by the Albanese government before the start of Parliament's second term.
"The average HELP debt today is about $27,600," Mr Clare said in his second reading speech.
"When this legislation passes it will cut that debt by about $5,520."
"If you have got a debt of $50,000 it will cut it by $10,000," he added.
"All up it will cut student debt by over $16 billion."
"This bill raises the minimum amount you have to earn before you have to start making repayments – from $54,435 in 2024-25 to $67,000 in 2025-26 and it reduces the minimum repayments you have to make."
He continued to explain that for people earning $70,000 it will reduce the minimum repayments they have to make by $1,300 annually.
The legislation targets HELP debt, VET loans and apprenticeship loans and is aimed for Australians earning between $60,000 and $180,000.
These changes will also raise the minimum repayment threshold, meaning if you earn above the current minimum repayment threshold of $54,435, you will have to pay a percentage of your entire wage as a repayment.
It is also known that young professionals and early-career workers, including nurses, teachers, and tradespeople, are expected to be the biggest winners from these changes.
However, the universities accord final report described it as 'deeply unfair' as it punishes students who follow their passion and interest.
Labor's latest reforms especially this one is seen as a vital initiative that provides immediate financial relief and long term stability to millions of Australians who have been trying to stay afloat in a tough economic conditions.