Student Debt Relief – A Win for Millions of Australians
Rising living costs and sluggish wage growth have made life tough for young Australians. That’s why the Government’s recent announcement on student debt has been welcomed as a major step forward.
From 1 June 2025, all student loans will be reduced by 20%. This across-the-board cut is expected to benefit more than 3 million Australians, wiping out over $16 billion in outstanding debt. Importantly, this reduction is automatic – no need to lodge forms or make special requests. The Australian Taxation Office will adjust balances and notify you once the change has been applied.
The reduction covers a wide range of loans, including HELP (HECS-HELP, FEE-HELP), VET loans, Australian Apprenticeship Support Loans, and Student Start-up Loans. Even those who paid off their debt after 1 June could receive a credit or refund.
The repayment system is also changing. From the 2025-26 financial year, the minimum repayment threshold is increasing to $67,000 (up from $56,156). This means graduates will have more breathing room before compulsory repayments begin, giving them a little more disposable income to cover everyday costs.
Looking at the bigger picture
While the cut brings relief, it also reshapes how people think about their long-term finances. For some, it’s an opportunity to redirect funds toward saving for a first home or investing earlier. For others, it may highlight the importance of voluntary repayments to reduce debt faster and strengthen future borrowing power.
Simmons Livingstone can help you make the most of the new student debt rules. Speak to our team about planning ahead for property purchases, investment, and wealth management on 1800 618 800 or via email at admin@simmonslivingstone.com.au.
