Labor to Introduce Bill Slashing HECS Debt Today
- admin928749
- Jul 23
- 2 min read
Prime Minister Anthony Albanese jumped on social media this morning with some big news — the government is finally introducing its plan to slash student debt.
If you’ve got a HECS debt, here’s what’s happening:The Labor government promised to cut student debt by 20% if re-elected, and now they’re making it happen. Albanese said in a short video, “We said it’d be the first thing we do, and today we’re doing it.”
And the best part?You don’t have to do anything — no paperwork, no applications. It all happens automatically.
So, how does it work?
Once the legislation passes, the ATO (Australian Tax Office) will apply the 20% reduction to whatever your HECS/HELP debt was on June 1, 2025. That means if you had $20,000 in debt, it’ll drop to $16,000.
This will also apply on top of any repayments you’ve made during the year — so if you've already started chipping away at your debt, this is a big bonus.
Who’s supporting it?
While Labor only needs the Greens to pass the bill in the Senate, the Coalition says they’ll discuss it this week. Either way, things are looking good for it to go ahead.
Education Minister Jason Clare says the average Aussie with student debt will see around $5,500 wiped from their $27,640 loan.“That’s a big relief for people trying to move out, save for a house, or just get ahead after uni,” he said.
What if your HECS debt is finally paid off?
If this change brings your balance down to zero, that’s awesome — but there’s one extra step:You’ll need to tell your employer that you no longer have a HECS/HELP debt.
To do that, just fill out a Withholding Declaration form and tick “no” where it asks if you have any outstanding education loans. Once that’s done, your employer will stop taking those extra repayments from your paycheck — so you should see a small pay rise each pay cycle.
A few things to keep in mind:
Don’t wait to do your tax return based on TikTok “finfluencers” telling you to delay.CPA Australia warns that’s bad advice — just do your return as normal.
The ATO will handle all the HECS updates, and you’ll be notified via myGov once it’s applied.
If you overpaid your HECS this year, you’ll get a refund when you lodge your tax return.
What about income thresholds?
From July 1, 2025, the government also wants to raise the income threshold for HECS repayments — from $54,435 to $67,000.That means if you’re earning less than $67,000, you won’t have to make any compulsory repayments (but you can still make voluntary ones).
So overall, this is a huge change that could really ease the financial pressure on millions of Aussies — especially young grads just getting started.
Stay tuned with Aus News Lanka – the leading platform for news for Australians.
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