The government’s $3 billion in student debt relief has kicked in.

A policy change effective this week recalculates the indexation of student debts to provide immediate relief and long-term financial fairness.

The government has adjusted the calculation of indexation for student loans, linking it to the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). 

This reform is backdated to 1 June 2023, addressing the sharp 7.1 per cent indexation rise in 2023. 

For the 2024 indexation period, the rate has been lowered from 4.7 per cent to 4.0 per cent, with credits applied directly via the Australian Tax Office (ATO). 

Adjusted loan balances should now be visible on myGov accounts.

The initiative will impact millions of Australians, wiping an average of $1,200 from HELP debts of around $27,000. 

Estimated indexation credits vary by loan size, with those holding debts of $15,000 receiving around $670, while a $100,000 debt translates to a $4,485 credit. 

Those who have fully repaid their loans after the 2023 or 2024 indexation will receive refunds if no other government debts are outstanding.

The Albanese Government has announced plans to further reduce student debt. 

If re-elected, Labor says it will cut outstanding student loans by an additional 20 per cent, raise the minimum repayment threshold, and lower repayment rates. 

A graduate with a $27,600 HELP debt could save an additional $5,520 under this proposal.

These reforms apply to a range of income-contingent loans, including HELP, VET Student Loans, and Australian Apprenticeship Support Loans.

This email address is being protected from spambots. You need JavaScript enabled to view it. CareerSpot News