SYDNEY, Australia: Australia has passed legislation to slash student loan debt by 20 percent, delivering over A$16 billion (US$10.3 billion) in relief to around three million Australians. The move is aimed at easing the financial burden on younger generations and marks the first law passed by Prime Minister Anthony Albanese's Labor government since it secured re-election in May.

"We promised cutting student debt would be the first thing we did back in parliament – and that's exactly what we've done," Albanese said in a statement. "Getting an education shouldn't mean a lifetime of debt."

The law fulfills a key campaign promise by the centre-left Labor Party, which targeted rising living costs and intergenerational inequality as core election issues.

Education Minister Jason Clare said the measure would help "take a weight" off the shoulders of younger Australians. "Young Australians don't always see something for them on the ballot paper, but they did this year and they voted for it in their millions," he said. "And we're repaying now the trust that these young Australians have placed in us."

Millennials and Generation Z made up 43 percent of the 18 million registered voters in the May general election, surpassing the Baby Boomer demographic. Labor had framed the loan reduction as part of a broader effort to address financial challenges unique to younger generations.

The government said the 20 percent reduction in student loans would translate to thousands in relief for individuals. For example, a graduate with an average loan of A$27,600 would see A$5,520 erased from their balance. The change will be backdated from June 1, 2025, before the scheduled 3.2 percent loan indexation for inflation takes effect.

In addition to the debt cut, the new law raises the minimum income threshold for student loan repayments, from A$54,435 to A$67,000. The adjustment means low-income earners will repay less over time and could delay repayment until their income rises above the new threshold.