Will You Get A Study Loan Refund In 2025?
ATO Announces New Rules for Study and Training Loans: Here’s What You Need To Know
The Australian Taxation Office (ATO) has made some important changes to how they calculate interest for study and training loans, resulting in refunds for some borrowers.
Here’s a simple breakdown of what’s happening and what it means for you.
What’s Changing?
The ATO will now calculate interest on study loans using the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). This change is already in effect and has been backdated to 1 June 2023.
New Interest Rates:
- From 1 June 2023: The interest rate is 3.2%, reduced from the old rate of 7.1%.
- From 1 June 2024: The interest rate is 4%, reduced from the old rate of 4.7%.
What Do You Need to Do?
You don’t need to do anything to request the refund. The ATO is automatically adjusting your loan and recrediting any extra interest you may have paid.
If your study or training loan account is in credit after the adjustment, this credit will be transferred to your Income Tax account.
Just make sure your bank account details are up to date with the ATO. This will help you get any refunds faster.
If your nominated account belongs to your accountant or financial adviser, they will receive the refund and will need to reconcile that amount.
Estimated Savings
Let’s say you had a $20,000 loan. Here’s how much you save with the new rules:
- For 1 June 2023:
- Old interest would have been $1,420.
- New interest is $640.
- You save $780.
- For 1 June 2024:
- Old interest would have been $1,006.74.
- New interest is $825.60.
- You save $181.14.
- Total Savings Over Two Years: $961.14
When Will You See These Changes?
Most people will see their accounts updated by the end of January 2025. Some might take a bit longer, especially if your situation is more complicated.
If you have any questions, feel free to reach out to your Aintree Group adviser! You can also read more on the ATO website.
