Australia will cut student loans by 20% to lower living costs and boost investment

Australian Prime Minister Anthony Albanese said on Sunday his government plans to cut student loans by 20% for about three million Australians, forgiving about $16 billion in debt.

The move builds on May’s budget, which tackled cost-of-living pressures in Australia and delivered debt relief for students, as well as more investment to make medicines cheaper, and a boost to a rental assistance program.

“This will help everyone with student debt right now, as we work hard to deliver a better deal for every student in the coming years,” Albanese said in a statement announcing the cut in tertiary education student loans.

The changes would mean the average graduate with a loan of A$27,600 would lose A$5,520, the government said.

The government said it already plans to reduce the amount Australians with student debt must repay each year and increase the threshold to start repaying.

Pressure on the cost of living, fueled by persistently high inflation, has particular resonance as the federal election approaches and the centre-left Labor government is now rallying behind its Conservative opponents.

($1 = 1.5246 Australian dollars)

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