Australia to cut student loans by 20% to lower cost of living and boost investment

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

The move builds on May’s budget, which attacked pressure on Australia’s cost of living and provided student debt relief, as well as increased investment to make medicines cheaper and a boost to the rental assistance program.

“This will help everyone with student debt right now while we work hard to ensure a better deal for every student in the years ahead,” Albanese said in a statement announcing the reduction in higher education student loans.

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

The government has said it is already planning to cut the amount Australians with student debt must pay back each year and raise the threshold for starting repayments.

Pressure on the cost of living, fueled by persistently high inflation, has particular resonance with the upcoming federal election and a centre-left Labor government now backing its Conservative opponents.

($1 = 1.5246 Australian dollars)

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