• Australian Prime Minister Anthony Albanese said he would cut student debt by 20% next year.
• This decision aims to strengthen “intergenerational equity” in the context of a tight electoral race for Labor.

The Australian government announced on Sunday a vast plan to cancel 20% of student debt. for around 3 million Australians.

The move, which will come into effect in June next year if the current Labor government remains in power, would wipe out around $10.5 billion in debt.

“This will help everyone who has student debt now, while we work hard to deliver better conditions for every student in the years to come,” Australian Prime Minister Anthony Albanese said on Sunday.

The government said the changes would mean the average graduate with an $18,200 loan would see $3,642 wiped from their bill.

The remaining debt would be refunded under a new plan, with a minimum reimbursement threshold of $44,200.

Debt relief is designed to promote “intergenerational equity”, Albanese told Australian radio on Monday, according to Bloomberg.

“We know that 80% of children attending primary school today will need either a university diploma or a technical and further education diploma, not as an added advantage for their employment, but as a a prerequisite for getting a job because of what’s happening in the economy.”

It is likely also intended to boost support for the Labor government, which is declining due to high inflation, high costs of living and a housing shortage. Federal elections are expected in May 2025.

However, not everyone is convinced it’s the right decision.

Andrew Norton, professor of practice of higher education policy at the Australian National University, said future debt should also be reduced.

“Recent years have highlighted how high levels of student debt can be stressful and damaging for young Australians,” he writes in The conversation.

“However, the Albanian government’s plan comes at a high price and the priorities might not be entirely correct,” he added.

“Manage future debt, for example by canceling fee increases under the Job Ready Graduates programis as important as reducing old debts. »

Richard Holden, professor of economics at the University of New South Wales, said the changes would not ease pressures on students’ cost of living.

“I don’t feel like it moves the needle,” he said. ABC News. “It’s not like taking 20% ​​off someone’s mortgage or car loan, so I don’t think it has much effect.”

In the United States, the average student loan balance is around $38,000.

However, Biden’s efforts to provide broad student loan relief have hit several stumbling blocks. The administration has introduced gradual relief measures over the past several years.

According to Business Insider Ayelet Sheffey reported: Biden’s second attempt at broader student loan forgiveness is blocked in court.

Donald Trump and Kamala Harris mainly focused on immigrationtaxes and economy during their presidential campaigns, likely due to several polls indicating a slowing of interest in the issue.

Biden’s Education Department continues to work on debt relief proposals; if finalized, the last would benefit 8 million borrowers in difficulty.