The Australian Government will apply a 20% reduction to all student loans as at 1 June 2025, before indexation was applied, to reduce the debt burden for those with a student loan.
On this page:
Does the 20% reduction apply to me?
Once legislation comes into effect, if you had an outstanding HELP or other student loan debt balance as at 1 June 2025, the Government will reduce your outstanding debt by 20%.
When will I see the 20% reduction on my debt?
Once legislation comes into effect, the ATO will retrospectively apply the 20% reduction to your debt and the indexation that was applied will also be adjusted.
You will not need to do anything to receive the 20% reduction.
Why did my student loan debt go up on 1 June 2025?
Indexation is applied to outstanding student debt by the Australian Taxation Office (ATO) on 1 June each year. This is the law and an automatic part of student loan administration.
On 1 June 2025, indexation of 3.2% was applied in the normal way to all student debt. 3.2% was calculated using the lower of the Consumer Price Index and the Wage Price Index. This figure is calculated by the ATO based on information published by the Australian Bureau of Statistics and is part of the normal annual indexation process that maintains the value of student debt in real terms.
Once legislation comes into effect, the ATO will retrospectively apply the 20% reduction to your debt and the indexation that was applied will also be adjusted.
What if my HELP loan for recent study was not showing on my ATO account by 1 June 2025? Will it be reduced by 20%?
Any units of study with a census date prior to 1 June 2025 will still be eligible for the 20% reduction – even if those debts have not yet been reflected on your account.
Once legislation comes into effect, the Australian Taxation Office (ATO) will apply the 20% reduction to eligible HELP loans, once they appear on your ATO account.
Individuals will not need to do anything to receive the 20% reduction.
What if the census date for the unit of study I deferred to a HELP loan was after 1 June 2025?
The 20% reduction applies to outstanding HELP debt as at 1 June 2025. This includes units of study with a census date prior to 1 June 2025. Census dates after 1 June 2025 are not eligible unless an exception applies.
An example of a circumstance where an exception may apply is where a census date was varied by a higher education provider from 31 May or 1 June to 2 June 2025 to avoid the census date falling on a weekend.
What if I had a HELP debt showing on my ATO account on 1 June 2025 but I paid the debt off after 1 June 2025
As the 20% reduction applies to your debt as at 1 June 2025, voluntary repayments made after this date will not affect the amount of your 20% reduction.
This means that there may be circumstances where the 20% reduction results in a credit to your HELP account, which may be refunded if you have no outstanding tax or other debts to the Commonwealth.
How much is the indexation that was applied on 1 June 2025?
The indexation rate applied on 1 June 2025 was 3.2% which is based on the ATO’s calculation of the Consumer Price Index (CPI).
Once legislation comes into effect, the ATO will retrospectively apply the 20% reduction and the indexation that was applied will also be adjusted.
How was the indexation rate determined?
The indexation rate applied on 1 June 2025 was 3.2% which is based on the ATO’s calculation of the Consumer Price Index (CPI).
In November 2024 the Australian Parliament passed amendments to the Higher Education Support Act, which capped the indexation of HELP and other student loans at the lower of either the CPI or the Wage Price Index (WPI).
For June 2025 the CPI indexation factor was the lower of both the WPI and CPI indexation factors calculated by the ATO. WPI was calculated as 3.7%.
Do I need to do anything to get the 20% reduction?
You will not need to do anything to receive the 20% reduction.
Once legislation comes into effect, the ATO will retrospectively apply the 20% reduction to your debt and the indexation that was applied will also be adjusted.
When will my HELP debt be reduced?
Once legislation comes into effect, the Australian Taxation Office (ATO) will retrospectively apply a 20% reduction to your outstanding HELP or other student loan debt as at 1 June 2025 and the indexation that was applied will also be adjusted.
Will the 20% reduction also apply to my available HELP balance under the HELP loan limit?
Once legislation comes into effect, the Australian Taxation Office (ATO) will retrospectively apply the 20% reduction to individuals’ HELP debt accounts and indexation that was applied on 1 June will be adjusted.
After the ATO has processed the 20% HELP debt reduction, a student’s available HELP balance will be re-credited. Once a student's HELP balance has been updated, it will be visible in the myHELPbalance website.
A student must have sufficient available HELP balance at the unit census date in order to defer their tuition fees to HELP loans. If you do not have sufficient available HELP balance, you will have to pay your student contribution amounts or tuition fees upfront.
What if I have already paid off my HELP or other student loan debts?
If you have repaid your outstanding student loans and don’t have a student loan debt balance as at 1 June 2025 you will not receive the 20% loan reduction. The reduction will only apply to debt that exists on balances as at 1 June 2025.
How will the 20% reduction be calculated?
The Government will reduce your HELP or other student loan debt amount that is outstanding at 1 June 2025 by 20%.
You can find out how much your outstanding HELP debt will be reduced by using the 20% HELP Debt Reduction Estimator.
20% HELP Debt Reduction EstimatorWill I receive a notification of my updated HELP debt?
The Government will communicate when the 20% debt reductions have been applied. You will be able to check your HELP and other student loan debt via myGov.
Will I be advised when my 20% reduction has been processed?
The Government will communicate when student loan debts have been adjusted.
You will be able to check your HELP and other student loan debt via myGov once the reduction has been applied, to see your new loan balance.
Why is the Government doing this?
Reducing the amount of debt that people currently have by 20% means Australians will have less student debt to pay back.
This directly recognises that many Australians are doing it tough and will take pressure off the costs that Australians have to budget for.
It will particularly help younger Australians, with around 70% of people repaying a HELP debt being 35 or younger. This is a critical time for saving, considering first home buying and or supporting or starting a family.
How can I find details of my outstanding HELP and other student loan debts?
You can check your HELP and other student loan debt via myGov after linking your account to the ATO’s Online Services.
What “other student” loans are included in this change?
As well as HECS-HELP, FEE-HELP, STARTUP-HELP, SA-HELP and OS-HELP, the changes will affect all of the following student loans:
- VET Student Loans
- Australian Apprenticeship Support Loans
- Student Start-up Loan
- Student Financial Supplement Scheme