If passed, the Bill’s cuts will be applied by the ATO, says federal government. Photo: stock/ Yan Krukau (Pexels)
A federal government bill before parliament to cut 20% of all student debt is expected to wipe more than $16 billion in repayments for more than three million Australians.
Prime Minister Anthony Albanese says that, if passed, the Bill will ease pressure on workers and students.
He explains that for someone with an average debt of $27,600, about $5520 will be wiped from their outstanding Higher Education Loan Program (HELP) loans.
The cut will be backdated to June 1, before indexation, and apply to all HELP, Vocational Education and Training (VET) student, apprenticeship support, student startup and other student loans.
The Education Department says the indexation will apply to the debt balance after the 20% cut is applied.
The Bill also raises the threshold for repayments from $54,435 to $67,000 and reduce minimum repayments.
The government says for someone on $70,000 a year, it will reduce minimum repayments by $1300 a year.
“Getting an education shouldn’t mean a lifetime of debt,” Albanese says.
“No matter where you live or how much your parents earn, my government will work to ensure the doors of opportunity are open for you.”
Federal Education Minister Jason Clare says the move will ease the burden on new graduated just entering the workforce.
“That’s real help with the cost of living. It means more money in your pocket, not the government’s,” he says.
Skills and Training Minister Andrew Giles says the Bill will deliver cost of living relief to almost 280,000 VET students by cutting $500,000 in debt from this group.
The 20% debt reduction will be applied by the Australian Tax Office, the education department says.
ACCOUNTANTS WANT MORE
The Bill, for one, has been welcomed by Chartered Accountants ANZ (CA ANZ) but it says it’s not enough to solve their profession’s growing staffing crisis.
CA ANZ CEO Ainslie van Onselen said enrolments in accounting degrees halved in the last seven years with completion of degrees declining since 2018.
“We hope this is the starting point for tertiary education funding and financing reform, not the end.”
Van Onselen says the high cost of a degree “remains a major barrier” to studying for an accounting career and that without more action, Australia faces a shortfall of 18,250 accounting, audit and finance professionals within five years.
CA ANZ wants ongoing HELP relief for students in courses facing critical skills shortages, accounting degrees reclassified as a STEM discipline and support for accounting in high schools extended, including a new national senior secondary curriculum.
“We need to support and broaden student pathways into the profession … if we’re serious about building a sustainable talent pipeline and improving Australia’s productivity,” van Onselen says.
