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In a major move to ease the financial burden on students, Australia on Thursday passed legislation to slash all student loan debts by 20 percent, effectively wiping out US$10 billion owed by more than three million Australians.
The law delivers on a key election promise made by Prime Minister Anthony Albanese, who pledged to make student debt relief a top priority as part of a broader cost-of-living strategy.
“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. “Getting an education shouldn’t mean a lifetime of debt.”
Higher education in Australia is often funded through government-backed loans, with students typically repaying them over time once their income exceeds a certain threshold. However, rising tuition costs - with a basic university degree costing upwards of US$25,000 (AUS$40,000) per year - have left many graduates facing long-term financial strain.
Under the new legislation, the average student debt of US$18,000 will be reduced by approximately US$3,500, providing immediate relief to millions.
The move has been welcomed by student advocacy groups and economists alike, who say it could boost disposable income, increase consumer confidence, and help younger Australians navigate an increasingly expensive housing and job market.
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