If you have a HELP or other study-related loan, there’s good news. A one-off 20% reduction is now being applied to eligible student debts, along with changes to how repayments are calculated.
What’s Changing?
- 20% Reduction: Student loans that existed as of 1 June 2025 will receive a 20% reduction. This applies automatically and includes any indexation added on that date.
- Higher Repayment Threshold: The minimum income threshold for compulsory repayments has increased to $67,000.
- Fairer Repayment System: Repayments will now be calculated only on income above the threshold, rather than your total income. This means smaller repayments for most loan holders.
What Does This Mean for You?
Depending on your income and loan balance, you may benefit in several ways:
- Lower repayments: Most people will pay less from their next tax return onwards.
- No repayments: If your income is below $67,000, you won’t need to make a compulsory repayment.
- Refunds: If your loan is in credit after the reduction and you have no outstanding debts, you may receive a refund.
Example Scenario
If you earn $80,000, your repayment will now be calculated only on the $13,000 above the threshold. This results in a lower repayment amount compared to the previous system.
What You Need to Do
- No action is required to receive the 20% reduction – it will be applied automatically.
- Make sure your bank details are up to date with the ATO to receive any potential refund.
- Lodge your tax return as normal.
When Will It Be Applied?
The reductions are being processed in stages. Most will be completed by the end of the year, with more complex cases taking a little longer.
