A sweeping cost-of-living boost has begun reaching millions of Australians, with the Albanese government activating its long-promised plan to cut student debt for roughly three million people.
The $16 billion initiative—legislated in July—will be implemented over the next three weeks, marking one of the largest reductions of education-related debt in Australia’s history.
The Australian Taxation Office (ATO) will begin notifying people from Saturday that their study-related loans have been automatically reduced by 20 per cent. The measure applies across HELP loans, VET Student Loans, Australian Apprenticeship Support Loans, Student Startup Loans, and other education lending programs. No application is required; the reductions will appear directly in recipients’ MyGov accounts, with notifications delivered via text, email, or inbox message.
The package also raises the minimum repayment threshold from $54,435 to $67,000—another change intended to give young Australians more breathing room as living costs continue to climb.
Education Minister Jason Clare described the rollout as “a big deal” for young Australians trying to establish themselves after finishing school, TAFE or university. “We promised it, Australia voted for it, and now it’s happening,” he said, adding that millions would “see it, feel it, and hear it” as the ATO begins issuing messages confirming the reductions.
For someone with the national average student debt of $27,600, about $5520 will be wiped from their balance. For others with larger debts, the relief will be even more significant.
One such example is 23-year-old University of Adelaide business student Dirk Hoare, whose debt of $46,000 will drop by around $9000. Working full-time while studying, Hoare said the policy offers real financial relief and will help him in his long-term goal of saving for his first home. “It’s just one less thing to worry about,” he said, noting that the easing of debt makes the idea of buying property with his sister “a bit easier”.
The ATO has already completed successful tests on a small number of accounts and is now moving into the full national rollout, which will continue into early December. According to the government, the debt reduction marks a major step in addressing cost-of-living pressures for younger Australians and ensuring education remains financially accessible.
