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2h ago

ATO to Apply 20% HECS Debt Cut From Mid-November, Finish by Mid-December

Cuts will be backdated to June 1 balances before indexation, with an average reduction of about $5,500 per borrower.

Education Minister Jason Clare said three million Australians would see the changes.
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Overview

  • The Australian Taxation Office expects to process about half of all HECS reductions by the end of November, with the remaining accounts finalized by mid-December.
  • The 20% reduction is calculated on balances as at June 1 before the 3.1% indexation, which will then be recalculated on the reduced amounts.
  • More than three million borrowers are affected, and the ATO estimates the combined reduction and indexation change will lower total student loan debt by about $20 billion.
  • For someone with the average HECS balance of $27,600, just over $5,500 will be removed from their debt.
  • Borrowers will receive ATO texts or emails when their reduction is applied, and the broader package also raises the repayment threshold to $67,000 from $54,500.