Billions of dollars in student debt have been wiped from the accounts of 100,000 Australians as part of the Albanese government’s pre-election promise to ease student loans, legislation for which passed Parliament in August and began rolling out today.

Around three million Australians will benefit from a total $16 billion reduction across all student loans, including HELP, VET, apprenticeship support, and student startup loans. The first 100,000 recipients will see their debt cut immediately, with the remaining three million to follow over the next two weeks. Australians will be notified via text message or email from the Australian Tax Office when the changes are applied.

Education Minister Jason Clare described it as the “biggest cut in student debt ever,” noting that the average reduction per person is approximately $5,500. He said, “Today, 100,000 young Australians will get the best text message ever, telling them that their debts have been cut by 20 percent. That’s a lot of help for young people, just out of TAFE or university, and just getting started in life.”

The 20 percent reduction is calculated based on debt balances as of June 1, before indexation was applied. In addition, the legislation increased the minimum income threshold to start repaying loans from $54,435 to $67,000 and reduced minimum repayments. These changes build on a $3 billion reduction in indexation earlier this year, after the government capped the rate at the lower of the wage price index or consumer price index.

The federal government has also announced a second round of 20 percent debt cuts, totaling another $16 billion, to be implemented by June 1 next year. Prime Minister Anthony Albanese said, “I will always fight for every young Australian to have access to a good education. 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.”