If you, your staff or kids have a HELP student loan, a package of changes is now live that reduces balances and makes repayments fairer. Here’s what’s changed, with quick, real-world examples:
A once-off 20% balance reduction applies to eligible study loan balances that existed on 1 June 2025. The ATO is applying this automatically – no forms, no requests. For example, if you balance on that date was $30,000, it’s cut by $6,000 to $24,000 before indexation is applied. If your balance was $10,000, it drops to $8,000, again before any indexation. You’ll see this credit flow through your ATO online account in due course.
From 1 July 2025, compulsory repayments switch to a marginal system and the minimum income threshold increases to $67,000. Under the new settings, you only pay the percentage on the portion of income above $67,000.
For instance, at $80,000 taxable income, just $13,000 sits above the threshold; at a 15c-in-the-dollar rate, the compulsory repayment would be $1,950 for the year. Someone on $66,500 would have no compulsory repayment because they’re below the threshold, while someone on $125,000 would pay the marginal amounts up to that level and then move into the next band for income above it. There’s also a cap at the top end (10% of total income) to ensure you’re not worse off than under the old design.
Indexation will continue on 1 June, but it’s now set to the lower of CPI or the Wage Price Index. That change has also been back dated to correct the outsized indexation that hit in recent years, with credits being applied to affected accounts. The practical outcome is that HELP debts shouldn’t outpace typical wage growth, making balances more predictable and less volatile.
Anyone with an eligible study loan on 1 June 2025 benefits from the 20% reduction, and most low-to-middle income earners will see smaller compulsory repayments (or none at all if they fall below the new $67k threshold).
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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