Cutting the HECS debts of millions of university students will address the financial inequality experienced by younger Australians, the prime minister says.
The federal government proposes to slash 20 per cent off university debts from June next year, as part of a pitch to younger voters ahead of the next federal election.
The cuts will apply to $16 billion worth of loans held by an estimated three million university students across the country.
For a student with the average HECS debt of $27,600, the bill will be reduced by more than $5500.
Prime Minister Anthony Albanese said the debt reductions would help make it easier for young people dealing with cost-of-living concerns.
"This is about putting money back into your pocket and putting intergenerational equity back into the system," he said in a speech in Adelaide on Sunday.
"Good for the cost of living, good for this generation and for generations to come.
"Fixing this intergenerational unfairness will require substantial investment.
"It will take time, but that's not an excuse to delay."
The prime minister said if Labor wins the election, due to be held by the end of May, it will be the first piece of legislation it will bring before the federal parliament.
As Labor eyes a political reset following a furore over flight upgrades and house purchases, Mr Albanese also unveiled an expanded push for fee-free TAFE places.
Under the change 100,000 fee-free vocational education places would be locked in each year from 2027.
More than 170,000 people have already benefited from the program since it was set up in January 2023, with 60 per cent of places taken up by women.
"TAFE and university are equally important to our workforce and equally vital to our future, and the choice to enrol in one or the other should be driven by one consideration alone, what is best for the student," Mr Albanese said.
"(There will be) more tradies to build our homes, more apprentices getting a start, more carers to look after our loved ones, whether they be young or old, more opportunities for Australians to train and retrain."
Education Minister Jason Clare defended the decision not to implement the student debt cuts before the next election.
The government is already moving to lower the indexation levels for HECS and provide payment for students doing practical work in certain professions as part of their degree.
"For a lot of young people, they're straight out of uni, they're on a low income, they're paying the rent, paying the bills, trying to save for a mortgage, trying to start a family, and they already have to start paying off their HECS bill," Mr Clare said.
"It's just a simple fact that a lot of young people are doing it tough, doing it tougher than many other Australians."
But opposition foreign affairs spokesman Simon Birmingham rubbished the HECS proposal, asking where the money to pay for it will come from.
"This isn't real reform. This doesn't change the student fees that somebody who starts uni next year pays," he told Sky News.
"This is simply a cash splash from Anthony Albanese, an attempt at trying to con or hoodwink an electorate ahead of an election from a government who has ultimately overseen the inflationary environment that has put so much pressure on young Australians."
Greens higher education spokeswoman Mehreen Faruqi said the debt reduction was a significant step forward, but needed to be enacted sooner.
“Instead of promising to wipe some student debt if they get re-elected, Labor should start wiping student debt now," she said.
"Student debt relief shouldn't be dangled like a carrot on a stick and held hostage to the next election results."
