Australia has enacted a landmark law reducing student loans by 20%, erasing over A$16 billion (around $10.3 billion USD) in debt for three million people. The legislation, passed by Prime Minister Anthony Albanese, fulfills a key election promise aimed at providing cost-of-living relief and easing financial pressure on graduates (Reuters).
The debt reduction translates to an average of A$5,520 per borrower. Additionally, the law raises the minimum income threshold for repayments from A$54,435 to A$67,000, ensuring lower-income earners are not immediately burdened by loan obligations. These measures are retroactive to June 1, 2025, before loans were adjusted for inflation, offering immediate relief to eligible graduates (Reuters).
The initiative has been widely praised by younger voters, who were a key constituency in Australia’s May general election. Millennials and Generation Z represented 43% of the electorate, influencing the Labor government to prioritize student debt relief as a central policy goal (Reuters).
Prime Minister Albanese emphasized the government’s commitment, noting, “We promised cutting student debt would be a priority – and that’s exactly what we’ve done.” Education Minister Jason Clare added that the measure will help graduates manage financial obligations while navigating rising costs of living (Reuters).
This debt reduction is part of a broader set of government initiatives to address cost-of-living pressures, which include affordable medicines, enhanced rent assistance, and targeted financial support programs. By relieving student debt, Australia is taking a major step toward improving economic security for millions of its citizens and providing a model for other nations grappling with similar issues (Reuters).