After much chatter, the Albanese Government is making good on its election promise of cutting the HECS-HELP debts of young people across the country — with the policy now set to officially take effect sooner than you might think.
ICYMI, Prime Minister Anthony Albanese revealed before the election in November that he would slash 20 per cent off all Aussies’ HECS-HELP debts, with his eventual election win seeing the policy take shape when it was introduced to Parliament on the first day of his new term in July.
Now, we’ve gotten a timeline for the roll-out of the debt cuts, with Education Minister Jason Clare saying last week that the government “is delivering” on the promise within the coming months?
When will HECS-HELP debts be slashed?
Per Clare’s announcement, the Australian Taxation Office will begin applying the 20 per cent cut to HECS-HELP debts by mid-November. By the end of November, about half of those with student loans will have their debts slashed, with the remaining cuts being applied by mid-December.
Barring any setbacks, that means every Aussie with a student debt will receive the cut by the end of this year. While that timeline looks ahead, the government revealed that the cut will apply to student debts as they stood on June 1, 2025.
For those doing the maths, June 1 is the date before indexation was applied, so the 20 per cent cut will be taken from whatever your outstanding balance was on June 1, before it rose by 3.2 per cent due to indexation.
“This cut is already locked into people’s balances at 1 June but soon they will be able to see it and feel it,” Clare said last week.
So the TL;DR is: if you have a student loan, the debt as of June 1 will be slashed by 20 per cent by the end of the year at the latest. So let’s get down to the brass tacks.
How much will be slashed from your HECS-HELP debt?
The policy outlines a one-off, 20 per cent cut to all student loans, so how much that equates to will depend on how hefty your debt is. As a handy guide, Clare said the average Aussie would have about $5,500 shaved off their loans as a result of the cut.
In terms of other numbers, the government said the cut applies to around three million Aussies, adding up to about $16 billion being wiped from our collective balances.
But the debt cut wasn’t the only change applied around student loans, with the government also raising the minimum repayment threshold from $54,000 to $67,000. This means you won’t automatically begin repaying your debt until you’re earning $67,000, or as Clare put it: “you don’t start paying off your university degree until your degree starts to pay off for you”.
How do you receive your HECS-HELP debt cut?
Thankfully, you don’t have to do a damn thing in order for 20 per cent to be slashed from your loans. The cut will automatically be applied to your balance by the ATO.
Fancy a squiz? Your balance should be accessible via the myGov website after linking your account to the ATO’s online services. Remember: you won’t see the slash until mid-November, or by the end of the year!
Why are you being blessed with the HECS-HELP debt cut?
The policy was sold as a way to lighten cost-of-living pressures, particularly for young Australians — who hold the bulk of student debt (70 per cent).
So there you have you have it, folks — I guess bon-bons aren’t the only gift we’ll get as 2025 wraps up!
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