Billions in Student Debt… Erased!

As part of its upcoming budget, the Australian government is wiping out $3 billion in student debt for more than three million Australian students who will see their loans scaled back.

“This continues our work to ease cost-of-living pressures for more apprentices, trainees and students, and reduce and remove financial barriers to education and training,” explains Skills and Training Minister Brendan O’Connor. “By backdating this reform to last year, we’re making sure that apprentices, trainees and students affected by last year’s jump in indexation get this important cost-of-living relief.”

By backdated to June 1^st, 2023, last year’s 7.1% increase – the most significant hike since 1990 – calculated based on the Consumer Price Index (CPI) will be lowered to the Wage Price Index (WPI) of 3.2%. As part of Australia’s plans for cost-of-living relief, loan indexation will match the CPI or the WPI, whichever is lower, thus preventing another shock increase like last year’s. “This will wipe out what happened last year and ensure it never happens again,” states Education Minister Jason Clare. Wider-ranging changes to universities include reviewing bank lending practices, changing the timing of indexation so it occurs after annual compulsory payments, and repealing the Job-ready Graduates program. The changes should take effect from June 2024.