However, the changes require legislation and parliament doesn’t commence until the end of July.

So, how will these changes be applied?

When can we expect the cuts to be made?

Once it’s passed, he confirmed that outstanding student debts will be wiped retrospectively.

Education Minister Jason Clare has announced cuts to student debts as well as changes to repayments from 1 July. Source: AAP / Lukas Coch

“The legislation will cut 20 per cent off your student debt and backdate it to 1 June, before indexation was applied,” Clare said in a statement to SBS News.

The legislation should be passed quickly, breezing through the lower house where Labor holds 94 seats, and the upper house, where Labor and the Greens hold a majority.

The Greens are expected to vote for the changes as they supported wiping all student debt during their election campaign.

How much will the average Australian save?

The reduction is on debts as of 1 June, so Australians who voluntarily decide to pay off their debts before this date will not be reimbursed.

What’s next in Labor’s student repayment reforms?

The Coalition did not support the cuts to student debt during the election campaign, arguing it was unfair for taxpayers to foot the bill.