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- Australia wipes $10 billion off student loans, targeting cost of living relief</p>
<p>July 30, 2025 at 11:42 PM</p>
<p>SYDNEY (Reuters) -Australia's parliament on Thursday passed a law to cut student loans by 20%, wiping more than A$16 billion ($10.31 billion) in debt for 3 million people, and fulfilling a key election promise to help mitigate the rising cost of living.</p>
<p>The law is the first passed by Prime Minister Anthony Albanese's centre-left Labor Party since being re-elected in May with one of the country's largest-ever majorities.</p>
<p>"We promised cutting student debt would be the first thing we did back in parliament – and that's exactly what we've done," Albanese said in a statement.</p>
<p>"Getting an education shouldn't mean a lifetime of debt."</p>
<p>Education Minister Jason Clare said the measure would help "take a weight" off the backs of young people.</p>
<p>"Young Australians don't always see something for them on the ballot paper, but they did this year and they voted for it in their millions," he said at a press conference.</p>
<p>"And we're repaying now the trust that these young Australians have placed in us."</p>
<p>Millennials and Generation Z made up 43% of the 18 million people enrolled to vote in Australia's May general election, outnumbering Baby Boomers.</p>
<p>Seizing on the generational shift, Labor made cutting student debt a key election promise, framing it as a measure to ease living costs and tackle intergenerational inequality.</p>
<p>The government said reducing student loans by one-fifth was equivalent to more than A$16 billion in debt relief for three million Australians.</p>
<p>It would mean a university graduate with an average loan of A$27,600 would have A$5,520 wiped, the government said, adding the changes would be backdated from June 1, 2025, before the loans were indexed 3.2% for inflation.</p>
<p>The law would also raise the minimum repayment threshold from an income of A$54,435 to A$67,000, reducing the amount low-income earners would have to pay.</p>
<p>($1 = 1.5516 Australian dollars)</p>
<p>(Reporting by Christine Chen in Sydney; Editing by Kate Mayberry)</p>
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