Big Changes To HELP Debt In Australia
The Australian Government has recently announced significant changes to the Higher Education Loan Program (HELP) and other student loan debts, aimed at providing much-needed relief for millions of Australians with student loans.
Here’s what you need to know about these changes, who’s eligible, and how it could impact you.
What’s changing?
The Government has introduced a one-off 20% reduction on HELP and other student loans. This is in response to last year’s unusually high inflation, which resulted in a steep 7.1% increase in student debts as of June 2023.
This measure was introduced to Parliament on 22 July 2025.
There is also a new indexation rate from 2023. It will be reduced to 3.2% instead of the original 7.1%.
Affected accounts will be adjusted automatically by the Australian Taxation Office (ATO).
The Federal Government will being applying the reduction from mid-November, so keep an eye out!
Which loans and years are affected?
The following loan types will be adjusted:
- any of the HELP loans, including HECS-HELP, FEE-HELP, STARTUP-HELP, SA-HELP, OS-HELP.
- VET Student Loans.
- Australian Apprenticeship Support Loans.
- Student Start-up Loans.
- Student Financial Supplement Scheme.
Source: Department of Education
The change targets indexation applied on 1 June 2023 and will also benefit anyone who paid off their loan after this date.
Who benefits?
- Anyone with an outstanding HELP or other eligible student loans as of 1 June 2023.
- Those who paid off their loan after June 2023 can receive a refund for any overpayment as a result of the change.
What do you need to do?
Nothing!
Adjustments will be made automatically by the ATO and you’ll be notified once your debt is recalculated. You can check your balance through the myGov portal.
How much will you save?
Instead of facing another steep increase, students will now receive an indexation credit from 1 June 2025.
The previous 7.1% indexation from last year will be reduced to 3.2% under the new policy.
| If your debt balance is: | You should get this much back: |
|---|---|
| $15,000 | $675 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
Source: ABC
Why is this happening?
The government’s aim is to protect past and current students from unexpected large debt increases due to inflation spikes, helping alleviate the financial stress associated with higher education repayments.
This will particularly help young Australians as they make up 70% of those with student loan debt.
What’s next?
The 20% reduction will be based on the debt amount on 1 June 2025, before indexation applies.
We will continue to keep you in the loop on socials with any updates.
If you’d like further advice, please get in touch with our team.
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your adviser.
