Millions of Australians have had their HECS debts slashed overnight as a promised 20 per cent cut comes into effect.
The Australian Tax Office has applied the changes, with 100,000 Australians receiving text message confirmations on Saturday and over three million people in total expected to receive the one-off repayment over the next fortnight.
It’s estimated about $16 billion in debt will be wiped — the biggest student debt cut in Australia’s history.
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Education Minister Jason Clare said most people would see the cut applied before Christmas.
“Today, 100,000 young Australians have got the best text message that they’ll ever get,” he said.
“They’ve got a message telling them that their HECS debt has been cut by 20 per cent.”
The cut will be backdated to June 1, before indexation happened.
Recipients will receive a text or email when the cut occurs and will be able to check their accounts to view the lower balance.
Someone with an average debt of $27,600 would have $5520 wiped from their outstanding Higher Education Loan Program loans, Clare said.
The one-off HECS debt reduction for uni students was confirmed when the federal opposition announced it would back the proposal in July.
The policy was a major Labor election commitment and the first legislation introduced to the new parliament.
Despite the Coalition saying during this year’s campaign it would not support the measure, Sussan Ley agreed the opposition would not stand in the way.
“We do care about students who are struggling with the cost of living, and I said we’d be positive where we can be and critical where we need to be,” she said at the time.
The laws will also raise the income threshold for minimum HECS debt repayments.
—With AAP
