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

Australian Prime Minister Anthony Albanese said on Sunday that his government plans to cut student loans for about three million Australians by 20%, resulting in about A$16 billion ($10.49 billion) in debt losses.

The move builds on May’s Budget, which attacked cost of living pressures in Australia and provided student debt relief, as well as more investment in lowering drug prices and support for the rent subsidy program.

“This will help anyone who currently has student debt, while we work hard to ensure every student gets a better deal in the years to come,” Albanese said in a statement announcing the higher education student loan reduction.

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

The government has said it already plans to reduce the amount Australians with student debt have to repay each year and raise the threshold for starting repayments.

The pressure on the cost of living, fueled by stubbornly high inflation, has particular resonance with the upcoming federal election and a center-left Labor government supporting its Conservative opponents in the polls.

($1 = 1.5246 Australian dollars)

Tune in