The Australian Government is progressing the 20% reduction of Higher Education Loan Program (HELP) or student loan debt and has committed to this being the first piece of legislation it introduces in the next Parliament when it returns from 22 July 2025.
This follows the Government’s announcement in November 2024 to reduce HELP or student loan debt by 20% and make HELP and student loan repayments fairer.
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This one-off 20% debt reduction measure will benefit 3 million Australians with a student loan debt. This will remove $16 billion in HELP and other student debt.
This is in addition to the $3 billion in debt that was removed through the Government’s changes to cap the indexation applied to student loans to the lower of the Wage Price Index or the Consumer Price Index. This means that indexation will never be higher than the changes in wages.
The indexation and debt reduction measures will reduce total HELP and other student loan debt by nearly $20 billion.
Why is this changing?
Reducing HELP and other student loan debts by 20% means Australians will have less student debt to pay back.
This measure 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 supporting or starting a family.
Who will benefit and how?
Anyone with one of the following student loans will benefit from these measures:
- 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
Use the estimator to see an indicative amount of the 20% reduction on your outstanding HELP debt.
What happens next?
The 20% reduction is subject to the passage of legislation. Parliament won’t sit again until after the Australian Taxation Office (ATO) applies annual indexation to student loans debts on 1 June 2025. This means Individuals won’t see the 20% reduction reflected in their student loan account straight away on 1 June 2025.
Following the passage of legislation, the ATO will apply the one-off 20% reduction. Individuals will not have to do anything.
The 20% reduction will be calculated based on what a person’s HELP debt amount was as at 1 June 2025, before indexation was applied.
This means that indexation would apply only to the remaining loan debt balance e.g. after the HELP debt has been reduced by 20%.
This builds on the changes to make HELP and student loan repayments fairer. Details are available at Making student repayments fairer.