In a big weekend pitch to the 3 million Australians carrying student debt, the Albanese Government has promised to cut 20% off all student loans from 1 June 2025.
The $16 billion debt cut, adding to the $3 billion cut as a result of indexation changes in the May Budget is a clever pitch in a space where the government has been found wanting – non-inflationary cost of living relief for younger Australians. They might not be able to buy a house, but their debt burden is suddenly looking better.
The Government also proposes to change repayments for HELP, VET Student Loan and other students loans, raising the minimum repayment threshold from $54,000 to $67,000. This is an interesting play – many outlets rushed to broadcast the annual saving to graduates without looking at whether students will ultimately pay more, as a result of paying the loan off more slowly, or why the Government has opted for this reform instead of booting out the hated and almost universally condemned Job Ready Graduates pricing plan for degrees – which sent humanities degrees in particular through the roof and failed to make significant dents on student course selection.
The true cost of embracing student debt cuts and repayment changes while leaving course pricing untouched is not yet clear, but for further insights into the impact of the repayment reform, look no further than Australia’s supreme leader in HE Policy, Andrew Norton, who has burned the weekend oil to explain what it could mean for graduates at different income levels in his blog.
The most significant elements of the Accord – widening participation by a million additional students, give or take – remain largely untouched and certainly unfunded, but in challenging economic times the Government knows where its bread is buttered.
Schooling the sector in how to engage with Australians on issues that they care about, the Government has put forward a valuable and valued policy that young Australians will care about, and many may vote for. If you are sitting in your graduate job on $70,000, wondering whether or not that degree was really worth it, the news that you are going to have your debt cut by 20% and an extra $1300 a year in your pocket to spend as you like as a result of these reforms is seriously attractive.
Australia may not have a major party capable of a coherent long-term higher education policy, but they certainly could teach us a thing or two in recognising the primal voting instincts of our oft-neglected students and graduates.
