Today the Albanese Government has passed legislation through the House of Representatives to cut the student debt of more than three million Australians.
The legislation will wipe around $3 billion in student debt from workers and students across the country.
The Universities Accord (Student Support and Other Measures) Bill 2024 which caps the HELP indexation rate at the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June 2023 will now move to the Senate.
The Government will backdate this relief to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that were indexed on 1 June last year.
This will benefit all Australians with a student debt, fixing last year's spike in the indexation of 7.1 per cent and preventing indexation from outpacing wages in the future.
An individual with an average HELP debt of $26,500 will see up to $1,200 wiped from their outstanding HELP loans.
After the legislation passes the Parliament, the ATO will automatically apply a credit for the difference between the current indexation rate and the new indexation rate to outstanding student loans.
If someone has completely repaid their HELP debt after 2023 or 2024 indexation was applied, the credit would be via a refund to their bank account (assuming there are no outstanding tax debts).
Estimated indexation credit for HELP debtors
| HELP DEBT at 30 June 2023 | TOTAL ESTIMATED CREDIT FOR 2023 AND 2024* |
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and 2024 will receive an indexation credit.
Australians with a HELP debt can find out how much this is estimated to benefit them using the HELP Indexation Credit Estimator here.
The Bill also introduces the Commonwealth Prac Payment from 1 July 2025 for around 68,000 higher education teaching, nursing, midwifery and social work students to help support them financially while they do the practical part of their degree.
It also expands FEE-FREE University Ready Courses which act as a bridge between school and university to help more Australians get a crack at university and succeed when they get there.
This is part of the first stage of reforms the Albanese Government will implement in response to the Universities Accord.
Quotes attributable to Minister for Education Jason Clare:
"We are one step closer to wiping out around $3 billion in student debt from more than three million Australians.
"The Bill has passed the House and now it is off to the Senate.
"The Universities Accord recommended indexing HELP loans to whatever is lower out of CPI and WPI.
"We are doing this, and going further. We are backdating this reform to last year. This will wipe out what happened last year and make sure it never happens again."
