Labour is promising to write off 10% of eligible student loan balances, as it launches its election campaign.

The policy would apply to current and future graduates who are New Zealand-based for tax purposes, did not benefit from the fees free scheme and still had a loan to pay back.

Loans with $2000 or less remaining would be written off entirely.

The policy was expected to cost $583.4 million over five years, the bulk of it in the first year when historical fees would be forgiven on April 1, 2027.

It would only apply to students who had completed their studies.

Announcing the policy at the party's campaign launch at the Due Drop centre in Auckland’s Manukau on Sunday, leader Chris Hipkins said it would help open doors and encourage talented people to stay in the country.

"Student debt can follow people for years, making it harder to save for a home, start a family or simply get ahead," he said.

"This policy means more money to save for a home, start a family, build a business or just have a bit more breathing space."

Hipkins said Labour wanted to make it easier for graduates - whether they be nurses, healthcare workers, electricians or social workers - to stay and build a future.

Tertiary education spokesperson Shanan Halbert said graduates had done the hard work to get a qualification, and should not have to spend years watching their student loan barely move.

"Labour will cut that debt and give people a bit more freedom to get on with their lives."