Total student debt could be slashed by up to $14billion – savings Aussies tens of thousands of dollars – under new plans to revitalise Anthony Albanese’s ailing Labor party ahead of the federal election.
The cabinet is reportedly exploring ways to alleviate the debt burden on graduates, following the cost-of-living budget earlier this year.
One option being looked at is to simply slash the total student debt of $70 billion by 20 per cent, which would reduce individual loans by the same amount.
Under the Higher Education Loan Program (HELP), previously named HECS, student loans are indexed to the consumer price index, meaning that graduates are stung by higher repayments when inflation rises.
Therefore, other options being considered are to tweak or remove indexation for a period, change repayment rates or pause repayments for those on parental leave.
Government ministers are also toying with the idea of raising the threshold at which graduates must start paying off their loans from the current income of $51,550.
The plans, first reported by the Sydney Morning Herald, are yet to be finalised.
Total student debt could be slashed by up to $14billion – savings individuals tens of thousands of dollars – under new plans to revitalise Anthony Albanese ‘s ailing Labor party ahead of the federal election (pictured: Mr Albanese visited TAFE Newcastle on Tuesday)
One option being looked at is to simply slash the total student debt of $70 billion by 20 per cent, which would reduce individual loans by the same amount
But, if approved, they would represent a bold pitch from Labor to younger voters who have been hammered 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 $4.3million clifftop mansion during a cost-of-living crisis when many Aussies are struggling to put food on the table.
This was compounded by the media frenzy around his alleged Qantas flight upgrades.
Mr Albanese has denied ever personally asking former Qantas CEO Alan Joyce for an upgrade.
Treasurer Jim Chalmers has previously made it clear that he wants to avoid any more cost-of-living relief that might drive inflation.
This makes changes to student debt more attractive as it avoids pouring any more money into the economy.
Daily Mail Australia approached the Cabinet Office for comment.
