Back in November, before the federal election, the Labor government promised to cut student loans and HECS-HELP debt by a further 20 per cent. For the thousands of young Australians struggling with the rising cost of living, it was a pretty tantalising offer. And, with Prime Minister Anthony Albanese elected for a second term, those of us with student debt were stoked knowing that a little bit of help was on the way. Well, as long as these promises were fulfilled.
With parliament set to return this week, this election cincher is set to be one of the first pieces of legislation discussed by the federal government.
So, with the bill almost certain to pass through the lower and upper houses, here’s what you should expect and when.
What was Labor’s HECS cut promise?
In May last year, Labor wiped $3 billion of HECS-HELP debt in an effort to make up for the hike in indexation of HECS-HELP debt in 2024. During the election, they promised to slice and dice a further 20 per cent of all student loan debts, adding up to a whopping $16 billion of student debt for approximately three million Aussies.
The cut was said to include those with HELP, VET Student Loan, Australian Apprenticeship Support Loan and other income-contingent student support loan accounts.
Plus, the minimum repayment threshold is being raised from $54,000 to $67,000. This is great news for those getting started in their chosen industry. According to Education Minister Jason Clare, the average Australian with a student debt will find a nifty $5,500 taken off their loans.
Not too shabby hey?
Is it 100% locked in?
Well, no. Although the Albanese government promised these changes to go into effect from June 1 if re-elected, the legislation changes still needed to be approved by the government. As parliament doesn’t go back into session until July 22, we have to wait for the legislation to go through the official channels before the cuts actually become a thing.
While that might sound nerve-racking, don’t forget that Labor holds a neat 94 seats in the lower house and a majority in the upper house, so the legislation is expected to pass in an easy, breezy, beautiful manner.
The annoying thing is, with the new financial year, HECS-HELP debt and student loans will rise by 3.2 per cent due to annual indexation.
What happens if it is passed?
In a statement to SBS News, Clare said that once passed, the government will backdate the cuts to before indexation saw student loans rise whenever it does actually pass.
“The legislation will cut 20 per cent off your student debt and backdate it to 1 June, before indexation was applied,” the Education Minister said.
“This is a game-changer for the more than three million Australians with a student loan.”
Do I have to do anything to be eligible?
Great news — you don’t have to do a thing! If you have student loan debt, the 20 per cent cut will be applied automatically to your MyGov and ATO account.
We love to see it!
The post Labor’s 20% HECS Cut Proposal Is Hitting Parliament This Week — Here’s What To Expect appeared first on PEDESTRIAN.TV .
