People repaying HELP student debts would get cost-of-living relief under changes to repayment arrangements to be announced by Prime Minister Anthony Albanese on Sunday.

The minimum threshold for repayments to start would be lifted by more than $10,000 a year, from about $54,000 in 2024-25 to $67.000 in 2025-26. This threshold would be indexed so it always remained about 75% of average graduate earnings.

The government would also move to a marginal repayment system for HELP debts. That would in the short term be to the advantage of people on incomes just above the threshold.

This change, which does not alter the overall amount of the person’s debt, was recommended by Bruce Chapman, the academic who was a designer of the original HECS scheme in the 1980s. Chapman undertook work for the universities accord released by Education Minister Jason Clare.

The accord recommended “reducing the financial burden of repayment on low-income earners and limiting disincentives to work additional hours by moving to a system of HELP repayment based on marginal rates”.

In a Sunday speech, Albanese will say the changes will boost take home pay for one million young Australians.

The average HELP debt holder would pay about $680 less annually in their repayments.

A university graduate earning $70,000 would have their minimum repayments reduced by $1,300. A graduate on $80,000 would receive a cut of $850.

The targeted relief would apply to all graduates earning up to $180,000 annually.

The changes extend to student loans for vocational education.

The government plans to bring in legislation for the changes next year, but it is not clear whether this will be before or after the election, which must be held by May.

The cost over the forward estimates would be about $300 million.

Albanese said:“We will make it easier for young Australians to save in the future and we are going to make the system better and fairer as well. This is good for cost of living. Good for intergenerational fairness. Good for building Australia’s future.”

This is the government’s second recent round of changes to the HELP scheme .

In changes to indexation in this year’s budget the government announced it would cut the student debt of more than three million people, wiping more than $3 billion from what people owe.

It capped the HELP indexation rate to be the lower of either the Consumer Price Index (CPI) or the Wages Price Index (WPI), backdated from June 1 last year. Indexation had been based on the CPI. Legislation for the budget change is currently before the parliament.