Cost and targeting
Coalition speakers argued that a $16 billion debt cut would be paid for by all taxpayers while giving larger dollar benefits to people with bigger debts, including some future high-income earners.
This bill became law on Aug 2nd, 2025.
Education & skills
The Act cuts eligible HELP, VET student loan, Australian apprenticeship support loan, student start-up loan, ABSTUDY student start-up loan and student financial supplement debts by 20 per cent if they were incurred on or before 1 June 2025.
The government introduced the bill to deliver an election promise and to respond to the Universities Accord’s finding that high and growing student debt was adding to cost-of-living pressure and could discourage people from higher education. The repayment changes implement the Accord recommendation to reduce the repayment burden on lower-income earners by using marginal repayment rates.
The bill sits in the government’s Universities Accord response. It combines a one-off election commitment to reduce existing student debts with longer-term repayment changes that the Accord recommended for fairness and work incentives.
Criticism focused less on whether debt relief was welcome and more on whether this bill was the right kind of relief. Coalition speakers said the 20 per cent cut was expensive and poorly targeted. Greens and independent senators argued it did not go far enough on student debt, indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages., Job-ready Graduates fees and unpaid placements.
Jason Clare, Minister for Education introduced this bill. It passed with support from Labor, Greens, Australia's Voice, some crossbench members; opposed by One Nation, some crossbench members.
Did it become law?
Yes
Became law 02 Aug 2025
Final passage
Recorded final vote
1 counted final-passage vote was recorded.
Passage speed
10 days
From introduction to the latest recorded parliamentary step
Meaning
The Act cuts eligible HELP, VET student loan, Australian apprenticeship support loan, student start-up loan, ABSTUDY student start-up loan and student financial supplement debts by 20 per cent if they were incurred on or before 1 June 2025.
The 20 per cent cut applies before the 1 June 2025 indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. step, so the reduced balance is the one that is indexed for 2025.
For debts newly incurred between 1 January 2025 and 1 June 2025, the Act reduces the debt amount by 20 per cent at the point the debt is worked out.
The Act also lifts the minimum compulsory repayment income from $54,435 in 2024-25 to $67,000 in 2025-26, with later increases linked to wages.
Compulsory repayments move to a marginal system: people repay only on income above the repayment threshold, rather than paying a percentage of their whole repayment income once they cross the threshold.
The explanatory memorandum says the debt cut will benefit about 3 million Australians with student loan debt, and that around 70 per cent of people repaying HELP debtA Commonwealth student loan debt under the Higher Education Loan Program, including HECS-HELP and other higher education loans that are repaid through the tax system. are aged 35 or younger.
The Act includes limited rule-making powers to handle transition issues and to move the 1 June 2025 reference date by no more than two days where specified conditions are met.
provide a one-off 20 per cent reduction to Higher Education Loan Program (HELP) debts in HESA, and other student loans provided under the Student Loans Acts that are incurred on or before 1 June 2025Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 explanatory memorandum
reduce a person’s debts as calculated at the end of the method statement in section 31 by 20%, before the application of indexationUniversities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 explanatory memorandum
This section applies if a person incurs an AASL debt during the period beginning on 1 January 2025 and ending on 1 June 2025 ... the amount of the AASL debt is the amount worked out under that section reduced by 20%.Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 introduced text
increasing the minimum repayment threshold from $54,435 in 2024-25 to $67,000 in 2025-26 (which will continue to increase each year with the growth in wages)Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 explanatory memorandum
introducing a marginal repayment system where compulsory student loan repayments are calculated only on income above the new $67,000 threshold rather than having it based on a percentage of the repayment incomeUniversities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 explanatory memorandum
The debt reduction measure will benefit 3 million Australians with a student loan debt. It will particularly help younger Australians, with around 70% of people repaying a HELP debt being 35 or younger.Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 explanatory memorandum
make rules modifying the operation of a provision ... as if a reference in the provision to 1 June 2025 were a reference to a later day specified by those rules (which must be no later than 2 calendar days after 1 June 2025)Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 introduced text
Context
The bill sits in the government’s Universities Accord response. It combines a one-off election commitment to reduce existing student debts with longer-term repayment changes that the Accord recommended for fairness and work incentives.
Universities Accord identifies student debt pressure
The explanatory memorandum says the Accord recognised high and growing student debt as a financial burden that was worsening cost-of-living pressure and could discourage future students from higher education.
Explanatory memorandum ↗Government caps student debt indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages.
The explanatory memorandum says the government had already delivered the Accord recommendation to cap student-loan indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. at the lower of CPI or wage growth, providing about $3 billion in relief.
Explanatory memorandum ↗APRA finalises HELP lending changes
The explanatory memorandum says APRA finalised targeted changes to how banks treat HELP repayments when assessing home loan applications, following another Accord recommendation.
Explanatory memorandum ↗Debt-cut bill introduced first after election
Jason Clare told the House the bill was the government’s first bill after the election and would cut the student debt of three million Australians by 20 per cent.
Minister’s second reading speech ↗Student debt changes become law
The bill received Royal Assent on 2 August 2025 and commenced the next day as the Universities Accord (Cutting Student Debt by 20 Per Cent) Act 2025.
APH bill page and final law metadata ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Recorded vote: 36 to 3.
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal Assent, turning the bill into an Act.
Key criticism
Criticism focused less on whether debt relief was welcome and more on whether this bill was the right kind of relief. Coalition speakers said the 20 per cent cut was expensive and poorly targeted. Greens and independent senators argued it did not go far enough on student debt, indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages., Job-ready Graduates fees and unpaid placements.
The Coalition ultimately said it would not stand in the way of the bill, while the Greens and several crossbenchers supported relief but moved amendments for broader changes.
Cost and targeting
Coalition speakers argued that a $16 billion debt cut would be paid for by all taxpayers while giving larger dollar benefits to people with bigger debts, including some future high-income earners.
Future students and course fees
Greens and independent amendments argued that a one-off debt cut did not fix future student debt or reverse Job-ready Graduates fee increases, especially for some humanities and social science courses.
Indexation and repayments
Several amendments sought stronger indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. changes, including ending student debt indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages., capping it at 3 per cent, or accounting for PAYG withholding before indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. was applied.
Placement poverty
Greens and independent amendments said students undertaking mandatory practical placements needed broader or higher payments, including calls to pay all mandatory placements at least at the minimum wage.
Further sources
Votes
The chamber-passage votes come first. Expand a vote to see the party breakdown.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Passed 36 to 3. Support came from Labor, Greens, Australia's Voice, and minor parties and independents. Opposition came from One Nation and minor parties and independents.
Earlier bill-stage votes
Passed 36 to 3. Support came from Labor, Greens, Australia's Voice, and minor parties and independents. Opposition came from One Nation and minor parties and independents.
Recorded amendment and procedural votes grouped by chamber. Expand a vote to see the party breakdown.
Senate
Moved by Mehreen Faruqi (Australian Greens). Defeated 10 to 33. Support came from Greens. Opposition came from Labor, Liberal Party, One Nation, UAP, and minor parties and independents.
This vote tested the Greens’ broader student-debt position before the Senate agreed to the bill in principle.
Moved by Mehreen Faruqi (Australian Greens). Defeated 10 to 33. Support came from Greens. Opposition came from Labor, Liberal Party, One Nation, UAP, and minor parties and independents.
This was a vote on whether the bill should wipe covered student debts rather than reduce them by 20 per cent.
Moved by The Hon Sarah Henderson (Liberal Party of Australia). Defeated 8 to 38. Support came from One Nation, UAP, and minor parties and independents. Opposition came from Labor and Greens. One cross-floor vote was recorded: The Hon Sarah Henderson (Liberal Party) voted aye. Liberal Party had split recorded votes.
This vote tested a Coalition-backed indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. cap proposal during detailed Senate consideration.
Moved by Mehreen Faruqi (Australian Greens). Defeated 10 to 34. Support came from Greens. Opposition came from Labor, Liberal Party, Nationals, UAP, and minor parties and independents.
This vote tested whether student debts should stop being indexed after the debt cut.
Moved by Mehreen Faruqi (Australian Greens). Defeated 10 to 33. Support came from Greens. Opposition came from Labor, Liberal Party, Nationals, UAP, and minor parties and independents.
This vote tested a narrower Greens indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. change after the proposal to end indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages. was defeated.
Moved by Mehreen Faruqi (Australian Greens). Defeated 10 to 33. Support came from Greens. Opposition came from Labor, Liberal Party, One Nation, UAP, and minor parties and independents.
This journal entry confirms the counted second-reading amendment vote.
Moved by Mehreen Faruqi (Australian Greens). Defeated 11 to 29. Support came from Greens and Australia's Voice. Opposition came from Labor, Liberal Party, One Nation, and minor parties and independents.
This was the final counted amendment vote before the bill was reported without amendment.
This list includes amendment votes, procedural votes and votes on the bill itself.
Parliamentary debate
Start here — lead voices
Jason Clare introduced the bill as the government’s first bill after the election, saying it would cut student debt by 20 per cent and make repayments fairer by raising the threshold and moving to marginal repayments.
Read in Hansard ↗Malcolm Roberts opposed the bill, calling it a con job and arguing it only partly offset debt increases caused by inflation and indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages..
Read in Hansard ↗Fatima Payman supported student debt relief but said broader higher education reforms were still needed to make education more affordable and fair.
Read in Hansard ↗Jonathon Duniam said the Coalition would allow the bill to pass, while criticising it as a costly and poorly targeted response to cost-of-living pressure and student debt indexationThe annual adjustment that increases student loan balances to keep them in line with an index such as inflation or wages..
Read in Hansard ↗All speeches by bloc
9 speakers · 10 contributions · 9 support
“This is really important legislation”Read the full speech in Hansard ↗
Hansard records 2 separate contributions by Jason Clare on this bill. They are grouped here so the speaker is listed once.
Minister's second reading speech
Jason Clare introduced the bill as the government’s first bill after the election, saying it would cut student debt by 20 per cent and make repayments fairer by raising the threshold and moving to marginal repayments.
“it cuts the student debt of three million Australians by 20 per cent.”Read this contribution in Hansard ↗
Second reading speech
Jason Clare closed the House debate by defending the 20 per cent debt cut and repayment reforms, saying the bill would help people with student debt and honour an election commitment.
“This bill cuts student debt by 20 per cent. It also makes important structural changes to the repayment system.”Read this contribution in Hansard ↗
“I move: That this bill be now read a second time.”Read the full speech in Hansard ↗
“This bill delivers both, cutting 20 per cent off all student debt for university students but also, importantly, vocational education and training students.”Read the full speech in Hansard ↗
“the Albanese Labor government is delivering on our commitment to cut student debt by 20 per cent.”Read the full speech in Hansard ↗
“I rise to speak in support of this critical piece of legislation”Read the full speech in Hansard ↗
“a bill that will deliver real cost-of-living relief to over three million Australians”Read the full speech in Hansard ↗
“The bill makes important structural changes to how the repayment system works.”Read the full speech in Hansard ↗
“The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 delivers on the government’s commitment”Read the full speech in Hansard ↗
4 speakers · 4 mixed
“we will not be standing in the way of the passage of this bill.”Read the full speech in Hansard ↗
“The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill is an admission of abject failure”Read the full speech in Hansard ↗
“it is their taxation dollars that are going towards this one-off $16 billion cost to the bottom line of the budget.”Read the full speech in Hansard ↗
“While the coalition is supporting the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025”Read the full speech in Hansard ↗
2 speakers · 2 mixed
“it needs to go much further.”Read the full speech in Hansard ↗
“University student debt is a weight on the backs of millions of people”Read the full speech in Hansard ↗
1 speaker · 1 oppose
“The Albanese Labor government is selling students a con job.”Read the full speech in Hansard ↗
2 speakers · 2 mixed
“We support any relief that eases the crushing weight of student debt on young Australians.”Read the full speech in Hansard ↗
“whilst not declining to give the bill a second reading, the House: notes that many degrees have increased in cost well above CPI”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Committee of the Whole debate
Committee of the WholeA Senate stage where senators consider the bill in detail and can move amendments to the bill text. debate
The bill reached this recorded parliamentary step.
Senate · Committee of the Whole debate
Committee of the WholeA Senate stage where senators consider the bill in detail and can move amendments to the bill text. debate
The bill reached this recorded parliamentary step.
Senate · Third reading agreed to
Recorded vote: 36 to 3.
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal Assent, turning the bill into an Act.