Both the banking and investment watchdogs will update regulations around lending to Australians with HECS-HELP debt at the request of the Albanese Government.
"People with a HELP debt should be treated fairly when they want to buy a house and we're working with the regulators to make sure they are," Dr Chalmers said.
It's widely reported that the changes will see banks and lenders disregarding HECS-HELP repayments when assessing whether a borrower can afford to repay a mortgage, as long as that borrower is expected to repay their education debt in the near future.
HECS-HELP repayments are typically taken from a person's income prior to them receiving it, much like how income tax is deducted, thereby reducing their take home pay.
It's also expected that banks and lenders will no longer consider HECS-HELP debt when calculating a borrower's debt-to-income ratio.
Dr Chalmers noticed education debt is hampering young Australians looking to purchase their own home, as banks and lenders may be reluctant to offer mortgages to them.
"The Australian Banking Association has indicated that one reason for this uncertainty is the interpretation of lending regulations and guidance by APRA and ASIC," he said.
"APRA has confirmed it will start consultation soon on the treatment of HELP debts in serviceability requirements and debt reporting [and] ASIC has confirmed it will move to quickly implement changes to its guidance on the treatment of HELP debts, following targeted consultation."
Clarification on lending requirements for builders and developers
Alongside changes to the treatment of HECS-HELP debts, will be adjustments to lending requirements for new apartment buildings.
"Some lenders have interpreted advice issued by APRA in 2017, that finance for construction of new unit blocks should depend on all properties being pre‑sold," Dr Chalmers said.
"APRA has confirmed it will communicate to banks that while it expects banks to consider the extent of presales as part of prudent credit risk management, APRA does not expect 100% pre‑sales."
Westpac CEO Anthony Miller said that confusion around pre-sale requirements is one "long-term and chronic" obstacle facing builders and developers.
"The clarification on pre-sale requirements will offer greater certainty to move quickly on developments and construction, while changing the treatment of HELP loans in serviceability assessments will assist aspiring home buyers," he said.
Labor promises forgiveness for a fifth of HECS-HELP debt
Changes to mortgage lenders' treatment of student debt is the third major overhaul offered by the Labor Government.
It follows changes to indexation – linking it to either inflation or wage growth, whichever is lower – implemented in late 2024 and a proposal to forgive around $16 billion of HECS-HELP debt if it wins the upcoming election.
That would see a person with an average HECS-HELP debt of $27,600 owing $5,520 less than they currently do.
"This is another significant reform that will help us build a better and fairer education system," federal minister for education Jason Clare said.
A federal election is due by May, and the Albanese Government promised to cut 20% of all student loans by 1 June.
The opposition is "deeply sceptical" of the policy, with shadow treasurer Angus Taylor saying the $16 billion cost equates to around $1,600 per household.
"More than 24 million Australians struggling with Labor's cost of living crisis will see no benefit from this policy, but all 27 million Australians will pay the price for it," he said.
The Coalition, meanwhile, is campaigning on allowing first home buyers to access their superannuation for a house deposit.
"We know property and housing is a really important part of someone's investment portfolio," Mr Taylor told the Savings Tip Jar podcast this week.
"We also know that the best indicator of whether someone's going to have a good retirement isn't just the superannuation they've got that's important, but it's whether they own or rent," he said.
Addressing criticism that such a policy would increase demand for housing, and thereby supply, Mr Taylor noted that "the important thing" is to simultaneously add to housing supply.
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