The Albanese Government has promised to cut 20% of outstanding student debt. Using administrative tax and HELP repayment data linked to university completion records, this paper assesses the potential short- and long-term impact of the policy by simulating what might have happened had such a cut been implemented in 2012 instead of 2025.

This paper identifies three lessons for 2025.

1. The size of the debt relief depends almost as much on graduation year as degree choice.
2. The policy will do little to accelerate debt repayment.
3. Most of the benefits of a student debt cut will go to future high-income earners. 

The paper concludes that if the Government is determined to proceed with the policy, there is one small adjustment they could make that would significantly reduce its unfairness. That adjustment would be to still cut 20% of all student debt, but do so by cutting each debt holder’s balance by an equal flat-dollar amount of about $5,500 (20% of the average debt), rather than cutting 20% of each individual’s balance as proposed under the current policy.