Total student debt could be reduced by up to $14 billion – with Australians saving tens of thousands of dollars – under new plans to revitalize Anthony Albanese’s weakened Labor Party ahead of the federal election.
The cabinet is reportedly exploring ways to ease the debt burden on graduates, following the cost of living budget from earlier this year.
One option being considered is to simply cut the total $70 billion student debt by 20 percent, which would reduce individual loans by the same amount.
Under the Higher Education Loan Program (HELP), formerly called HECS, student loans are indexed to the consumer price index, meaning graduates are hit with higher payments when inflation rises.
Therefore, other options being considered are to modify or eliminate indexation for a period, change payment rates or pause payments for those on parental leave.
Government ministers are also toying with the idea of raising the threshold at which graduates must start repaying their loans on current earnings of $51,550.
The plans, first reported by the Sydney Morning HeraldThey have not yet been finalized.
Total student debt could be reduced by up to $14 billion – saving individuals tens of thousands of dollars – under new plans to revitalize Anthony Albanese’s weakened Labor Party ahead of the federal election (pictured: Albanese visited TAFE Newcastle on Tuesday)
One option being considered is to simply reduce the total $70 billion student debt by 20 percent, which would reduce individual loans by the same amount.
But, if passed, they would represent a bold pitch from Labor to younger voters who have been hit by rising rates and interest rates ahead of next year’s election.
The Prime Minister has endured a torrid few weeks following the damaging revelation of the purchase of his $4.3 million clifftop mansion during a cost of living crisis in which many Australians are struggling to put food on the table. .
This was compounded by the media frenzy surrounding his alleged improvements to Qantas flights.
Albanese has denied personally asking former Qantas chief executive Alan Joyce for an upgrade.
Treasurer Jim Chalmers has previously made clear he wants to avoid further cost-of-living relief that could fuel inflation.
This makes changes to student debt more attractive, as it avoids injecting more money into the economy.
Daily Mail Australia has approached the Cabinet Office for comment.
