In the 2025-26 budget, the Albanese government has taken vanishingly few measures to directly and effectively relieve students who are under stress due to the cost of living crisis, international student caps, and HECS-HELP debt. When it comes to education, Jim Chalmers seems to be in a creative drought; he’s used ctrl+C a few too many times in this year’s budget and it really shows.
The government has declared it will slash national collective student debt by 20% with effect on the 1st of June 2025, before indexation is applied. This is set to wipe $16 billion from outstanding student HECS-HELP loans. The government has not announced any measures to address the increased cost of tuition itself, an impact of the Liberal government’s Job Ready Graduates package and a direct cause of the current HECS debts which have ballooned to $74 billion dollars in outstanding national debt. However, this measure is not new: the government announced it in December 2024, and has not adjusted the measure in this budget from what had previously been released. The government has also decided to lift the repayment threshold for graduates from $54,000 to $67,000.
In a decision that Honi would call questionable, the government has announced that by 2050 it aims to have 80% of the working population with a tertiary qualification. This is an increase from 77%, the current rate: a spokesperson for Jason Clare told Honi that this increase was “ambitious target”. The budget aims for “a rise on the previous year” and was unchanged from Chalmers’ last budget. The measure seems counterproductive for the government given the crippling HECS debts that 3 million students have incurred as a result of degrees undertaken, which have led to the Labor government repeatedly wiping portions of student debts. In past years, the government cut indexation rates from 7.1% in 2023 to 4% in 2024, but this has clearly not had the desired effect on the student populace.
Rather than removing the changes to HECS fees that were introduced by Scott Morrison in the 2021 Job Ready Graduates program, Chalmers has decided to put a bandaid on the gaping wound of student debt as a substitute for making education affordable — or better yet, free. Chalmers, as someone who would have benefited from free university as enacted throughout the 1970s and 1980s, has a curious method of addressing affordability of tertiary education. This is only the latest in a series of attempts by both Labor and Liberal governments to fix the problem of students’ tuition fees. But to make up for it, Chalmers will do his best to make sure more and more students get sucked into the financial haemorrhage of HECS-HELP loans. Thanks a lot!
Angus Fisher, the USyd Sydney Representative Council President, commented, “The 20% cut to HECS debts is a huge win for students… What this shows is the power student unionism has in pushing the current government to do good, as this was a result of the SRC and NUS being involved in the accords process.”
He added, “In future, student unionists can further push this government to do even better for students, for measures like free education, fully paid placements, and supporting student housing. What is certain is under a Dutton Liberal government we don’t get this policy and weaken the power of student unionists. Students should be putting the Liberals last.”
A spokesperson for Jason Clare, the Minister for Education, said to Honi that “We have listened to students’ concerns and we have reduced HELP and other student debts by over $3 billion by changing the way that HELP and other student loans are indexed.”
They continued, “The Government will also provide additional Needs-based Funding for academic and wrap around supports to help students succeed, including scholarships, bursaries, mentoring, and peer learning. Universities will receive demand driven Needs-based Funding aligned with the number of students they enrol from under-represented backgrounds to deliver this.”
For international students, the Labor government has twisted itself in knots trying to exploit students for cash and simultaneously reduce their alleged pressure on Australian housing. While enforcing a strict student cap that will have significant effects on international students, who comprise 46% of enrolments at the University of Sydney, the government has also announced a performance target to increase the number of students enrolled in offshore education and training delivered by Australian providers from the rate in 2024-2025. International students are encouraged to study with Australian tertiary institutions, boosting our economy, only so long as they do not take up limited housing resources.
Chalmers has introduced medical training opportunities for First Nations students, focusing on primary care, namely general practitioners. The government is using this measure to increase representation of First Nations individuals in the medical field, implementing $35.6 million over four years to introduce 100 new medical Commonwealth Supported Places (CSPs) for First Nations medical students. These places will be introduced from 2026 and continue annually, and will be raised to 150 CSPs from 2028. While this sounds like a good measure, it isn’t exactly new. The same measure had been previously introduced and targeted specifically at First Nations regional students, which then expanded to include First Nations students from metropolitan areas. These students will be allocated CSPs through a competitive process moderated by the Department of Health.
The government has also announced a measure to establish 100,000 permanent free places at TAFE, starting from 1st January 2027.
But the Treasury has grand plans for tertiary education. Firstly, they intend to establish a so-called Australian Tertiary Education Commission, which will apparently “guide tertiary education reform over the long-term.” The ATEC will start operating in an interim capacity from 1 July 2025, and permanently from 1 January 2026, but performance measures have not been announced for this yet, which indicates that this shiny new measure has no real substance. The performance measures will not be developed until after ATEC has been permanently established, which would be a little unfortunate if ATEC did not run as smoothly as the Treasury hopes it will.
Secondly, the government intends to create a new “Managed Growth Funding system” that will “guarantee a place” to low-SES and disadvantaged students. This system grants universities the ability to negotiate for a higher amount of funding through which to allocate CSPs. Comparatively, the current system has a ‘maximum basic grant amount’ (MBGA) which means that, although domestic students are entitled to CSPs, the university can choose to reject an enrolment application rather than exceed the MBGA. The MBGA is a specific amount of money that the Treasury distributes between universities which they then use to allocate CSPs. The MBGA will be ousted in favour of a system that theoretically awards grant money based on the number of students enrolled at a university. That grant money is now a negotiable figure, based on an over-enrolment buffer where “a small proportion of additional students” can receive CSPs in addition to the allocated figure. For a measure that is supposed to “reform” our education, it seems wholly unremarkable.
Meanwhile, Chalmers has copied many measures that were already mentioned in previous budgets, as well as completely overlooking issues of importance to the tertiary education sector. The National Student Ombudsman, which was announced in the 2024-25 Budget, has been re-declared in this year’s budget, for no apparent reason other than Chalmers’ deep desire to appear to create change while sticking with his old and familiar policies. The NSO’s role is to investigate student complaints regarding issues which include sexual assault, racism and homophobia. It began accepting these complaints in February 2025, so Chalmers has tried to pull the wool over our eyes by marketing it as something new. Nice try.
Last but not least, the Labor government has wiggled AUKUS into the tertiary education portfolio too. The government has propelled a Nuclear Powered Submarine Program, using “education pipelines” to “support the nuclear workforce.” In a continuation of policy from 2024-2025, the government aims to allocate CSP funding specifically so that students can “support sovereign workforce development” by studying in this program. In 2024 all of the CSP allocations for this program were achieved. While the USyd community have continuously condemned AUKUS, this program seems like a wildly ill-judged attempt to use students as resources for a program that many students vehemently oppose.
This year’s budget is by no means impressive, nor can it be called original. Chalmers has reiterated a host of measures that had already been announced in the vain hopes that his lacklustre treatment of the tertiary education sector, and introduced a few measures which might see some changes for students. Can we call it a good budget? Nope. But will we be here again in October for a second budget after the election? A solid maybe.
