Federal Education Minister Jason Clare has announced that Labor’s first legislative move when Parliament returns in July will be to cut every HECS-HELP student debt by 20 per cent, with the reduction backdated to 1 June to offset annual indexation.
In a post on social media, Clare said:
“Wiping 20% off every student debt is the very first piece of legislation Labor will introduce when Parliament returns… and it’ll be backdated to this Sunday, 1 June.”
Clare explained that although HECS debts will be indexed on 1 June as usual, the legislation—once passed—will effectively override that increase. “If you’ve got a HECS debt today of $50,000… it will cut your $50k debt by 20% or $10,000. From $50k to $40k. Indexation will then be applied on the $40k, not the $50k,” he said.
“It means less debt and more money in your pocket. Not the government’s.”
In an interview with ABC Radio Adelaide, Clare reaffirmed the plan, confirming it would affect approximately three million Australians with outstanding university or TAFE debts. The estimated cost to the federal budget is around $700 million over four years, with a longer-term impact of $16 billion.
Clare also clarified that the new legislation will raise the minimum income threshold at which repayments start—from $54,000 to $67,000—and lower annual repayments. For example, someone earning $70,000 will see their yearly repayment reduced by approximately $1,300. These changes stem from recommendations by Bruce Chapman, the original architect of the HECS system.
When asked whether those who pay off their HECS debt after 1 June will be eligible for a refund, Clare said the government would examine the matter to ensure fairness but reiterated the benefit is aimed at current debt holders.
Clare also addressed broader education reforms, including the potential review of the Morrison-era Job-ready Graduates Scheme, which significantly increased student contributions for arts degrees. He acknowledged that the scheme had failed to reduce enrolments in those fields and pledged that the newly created Australian Tertiary Education Commission would assess long-term solutions.
In response to questions about NAPLAN results and declining high school completion rates, Clare said the government’s new funding agreement with states and territories will invest $16.5 billion into schools, tied to reforms like phonics checks, early numeracy assessments, and catch-up tutoring. He highlighted the urgent need to lift outcomes for students in disadvantaged communities, where one in three fall below minimum literacy and numeracy standards.
The Minister also noted the importance of increasing civic education and understanding of Australia’s political system, particularly in high school, and pointed to government efforts to make school visits to Parliament House more accessible.
Clare confirmed the government’s continued focus on early childhood education, including a 15 per cent pay rise for early educators and building more centres in under-served areas.
“We’ve got to deliver on the things we committed to,” he said.
“Cutting student debt by 20 per cent is just the beginning.”
Support our Journalism
No-nonsense journalism. No paywalls. Whether you’re in Australia, the UK, Canada, the USA, or India, you can support The Australia Today by taking a paid subscription via Patreon or donating via PayPal — and help keep honest, fearless journalism alive.
