Cut to students’ HECS debt set to come into effect over next two months

Australians with a student debt will soon see their balance slashed as a Federal Government promise is rolled out.

Australian Taxation Office officials expect 50 per cent of those with a HECS debt to have it cut by 20 per cent by the end of November, with the other half to be finalised by mid-December.

For someone with the average debt of $27,600, more than $5500 will be taken off the outstanding amount.

The 20 per cent figure will be based on the debt total before the most recent round of indexation of 3.1 per cent at the beginning of June.

The amount charged through indexation will then be recalculated based on the reduced amount. The ATO estimates the reduction in student debt and indexation will reduce total student loan debt by about $20 billion.

As of February, New South Wales h