This note analyses the significance of student debt as part of the cost-of-living crisis, the current Job-ready Graduates package and HECS-HELP debts, and the need for policy reform to support younger generations and reduce intergenerational inequity in the years to come. It summarises what the major parties are promising ahead of the 2025 federal election.

Key insights

• Total outstanding HELP debt reached $81 billion in 2023-24 across 2.9 million individuals, equating to an average student debt of $27,650.
• Labor’s commitment to a one-off 20% cut in HELP debt translates to a reduction of around $6,000 for an average $30,000 of student debt but is distributionally unfair.
• Changes to HELP loan indexation offers a buffer against spikes in inflation but does little to address the growing burden of student debt.
• More substantive policy reforms are needed to address rising student debt, including a return to the fairness principles that underpinned the original HECS model.