HECS Debt Cuts to Begin Soon for 3 Million Australians
CANBERRA – Federal Education Minister Jason Clare has announced that 3 million Australians with Higher Education contribution Scheme (HECS) debt will soon see their balances reduced by 20 per cent. The cuts, already factored into balances as of June 1, will be visible to borrowers in the coming weeks, providing immediate financial relief.
The policy, announced before the May 2025 election, aims to alleviate the burden of student debt and represents a $16 billion reduction over six months. For the average HECS debt holder owing $27,600, this translates to a reduction of over $5,500. The change comes alongside an increase to the income threshold for repayments, raising it from $54,500 to $67,000.
“We promised we would cut your student debt by 20 per cent, and we are delivering. This is a big deal for 3 million Australians,” Minister Clare said in a statement. “This cut is already locked in to people’s balances at 1 june, but soon they will be able to see it and feel it. Just out of uni,just getting started,this is taking a weight off their back.”
The reduction and altered indexation were the first legislative actions taken by the re-elected Albanese government. While student loans don’t directly impact the federal budget’s bottom line - the government receives returns on the debts – HECS debts are included in the government’s overall net debt calculations.
