The Albanese Government will cut the student debt of more than three million Australians in this month’s Budget, including more than 18,000 in the federal electorate of Corangamite.

Our Budget will be all about easing pressure on people living across our region and continuing the fight against inflation at the same time as we lay foundations for future growth in our economy.

This action taken will wipe around $3 billion in student debt – easing pressure on workers and students across the country.

It will provide significant relief for local students and those with a student debt while continuing to protect the integrity and value of the HELP and other student loans systems, which have massively expanded tertiary access for more Australians.

In response to the Australian Universities Accord, the Government will cap the HELP indexation rate to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June 2023.

The Government will backdate this relief to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on 1 June last year.

This will benefit every person across the nation with a HELP debt, fixing the issue of last year’s spike in the CPI indexation rate of 7.1 per cent and preventing growth in debt from outpacing wages in the future.

The 2023 indexation rate based on WPI would only have been 3.2 per cent.

An individual with an average HELP debt of $26,500 will see around $1,200 wiped from their outstanding HELP loans this year, pending the passage of legislation.

Estimated indexation credit for HELP debtors

*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and are subject to indexation on 1 June 2024 will receive an indexation credit.

Australians with a HELP debt can find out how much this is estimated to benefit them using the HELP Indexation Credit Estimator: education.gov.au/HELPestimator.

This is part of the first stage of reforms the Albanese Government will implement in response to the Universities Accord.

The Albanese Government will also establish a Commonwealth Prac Payment to support students undertaking mandatory work placements required for university and vocational education and training qualifications.

The new payment will be for eligible teaching, nursing, midwifery and social work students.

The payment will provide around 68,000 eligible higher education students and over 5,000 VET students each year with $319.50 per week during their clinical and professional placement periods.

Benchmarked to the single Austudy per week rate, this payment will provide cost-of-living relief for many students. It will be means-tested and available from 1 July 2025 and will be in addition to any income support a student may also receive.

The Government will work with the higher education and vocational education sectors to introduce and deliver this new support.

The introduction of this payment acts on the advice of the Universities Accord and the Women’s Economic Equality Taskforce.

Paid placements will help ease the care and teaching workforce skills shortages identified in the Government’s Employment White Paper and assist more students to commence and complete their studies.

With the majority of students and workers in these critical care fields being women, the payment also helps implement the Government’s gender equality strategy, Working for Women. The payment will also help support the pipeline of social workers available to support those affected by family, domestic and sexual violence.

This initiative builds on our reforms to make the HELP system fairer.

Quotes attributable to Federal Member for Corangamite, Libby Coker:

“The Albanese Labor Government is cutting student debt for more than 18,000 people in Corangamite – across the Surf Coast, Bellarine, Golden Plains and Geelong region.

“This will make the system fairer and benefit all Australians with a HELP debt.

“The Albanese Labor Government is also addressing the risks of placement poverty for teaching, nursing, and social work students across the region.

“I’ve heard about the cost-of-living stress that students face with unpaid, mandatory placements and that’s why this Government is acting.

“This will help encourage more students to study teaching, nursing and social work – all of which are critical to our local workforce and community.”

Quotes attributable to Minister for Education Jason Clare:

“This will wipe out around $3 billion in student debt from more than three million Australians.

“The Universities Accord recommended indexing HELP loans to whatever is lower out of CPI and WPI.

“We are doing this and going further. We will backdate this reform to last year. This will wipe out what happened last year and make sure it never happens again.”

Quotes attributable to Minister for Skills and Training Brendan O’Connor:

“This continues our work to ease cost of living pressures and reduce and remove financial barriers to education and training.

“VET Student Loans and Apprenticeship Support Loans support many Australians to get the skills they need for secure and rewarding careers, and these changes make sure that help is provided on a fairer basis.

“By backdating this reform to last year, we’re making sure that those with student loans affected by last year’s jump in indexation get this important cost-of-living relief.”