Calling all former uni and TAFE students across Victoria and beyond: this is not a drill. After months of discussions, Labor has officially passed legislation to wipe 20 per cent of HECS debt for former higher education students, with Aussies set to save an average of $5,500 ($680 every year). The concept of wiping such a hefty proportion of student debt was first floated by Anthony Albanese back in November as a key election promise, and now – after passing the piece of legislation through Parliament earlier this week – it’s set to go ahead.
Is all HECS debt being wiped in Victoria?
Not quite, but the legislation will see a huge 20 per cent of HECS debt wiped across Australia. According to the Australian Federal Government, 3 million Australians will benefit from the initiative, with an estimated $16 billion in debt being wiped across the country.
When can I expect my student debt reduction?
Though the measure has been officially passed, it’s expected to take a few weeks to come into effect. That being said, the debt-wiping move will be applied before the June 1 indexation, applying retrospectively to debts that have existed up until now.
What do I need to do to reduce my HECS debt?
You don’t need to do anything – over the next few weeks, the Australian Tax Office will apply the debt reduction to your HECS debt as it was on June 1, 2025, before the latest round of indexation was applied. From then on, you’ll start saving.
How will HECS payments change?
The changes to the HECS system will include moving the threshold at which you start paying back your HECS. Students will be required to start paying back their loans only once they’re earning $67,000 (a figure that previously sat at $54,435). These changes are expected to save Aussie former students an average of $680 every year.
It's also worth noting that the adjustments do not apply to people earning $180,000 or more.
Are more reforms coming for higher education in Victoria and Australia?
Education minister Jason Clare has hinted at further reforms that could be put into place across Australia, including adjusting university course fees to be more reflective of industry salary averages, and filling skills shortages by reducing fees for courses such as teaching, nursing and psychology.
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