In a significant financial relief effort, student debt amounting to billions has been erased for 100,000 Australians.

This initiative marks the fulfillment of the Albanese government’s campaign pledge to alleviate student loan burdens. The legislation, approved by parliament in August, is now being implemented.

Overall, around three million Australians will benefit from the cancellation of $16 billion in various types of student loans, including HELP, VET, apprenticeship support, and student startup loans.

The initial wave of debt forgiveness impacts 100,000 individuals starting today, with an additional three million set to benefit over the next two weeks.

The Australian Tax Office will notify recipients of these changes via text messages or emails as the adjustments are automatically made to their accounts.

Education Minister Jason Clare said it was the “biggest cut in student debt ever”.

“Today, 100,000 young Australians will get the best text message ever, telling them that their debts been cut by 20 per cent,” he told Weekend Today.

“On average, that means about $5500 of debt wiped off their back.

”That’s a lot of help for young people, out of TAFE, just out of university, maybe they’re just out of home. They’re certainly just getting started in life.”

The 20 per cent reduction will be calculated based on what the debt amount was on June 1, before indexation was applied.

The legislation also raised the minimum amount people have to make to start repaying their loans from $54,435 to $67,000 and reduced the minimum repayments.

These changes are in addition to the $3 billion cut from the indexation applied to student loans earlier this year after the government switched the index rate to be whichever is lower: the wage price index or the consumer price index. 

The federal government earlier this month announced it will introduce a second round of 20 per cent cuts to student loan debt, totalling another $16 billion, by June 1 next year. 

“I will always fight for every young Australian to have access to a good education,” Prime Minister Anthony Albanese said in a statement at the time.

”This will help everyone with student debt right now, whilst we work hard to deliver a better deal for every student in the years ahead.”