The Australian Government’s Universities Accord (Cutting Student Debt by 20 per cent) Act became law on 2 August 2025. The legislation will reduce student loan debt by 20% . The Australian Taxation Office (ATO) will commence processing the reductions in November.
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This one-off 20% debt reduction measure will benefit over 3 million Australians with a student loan debt. This will remove over $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. Learn more about the HELP indexation credit.
The indexation and debt reduction measures will reduce total HELP and other student loan debt by around $20 billion.
Why is this happening?
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 now?
The Australian Taxation Office will apply the reduction. Individuals will not have to do anything.
Most people will get their reduction before the end of 2025, however, more complex reductions may not be processed by the ATO until early 2026.
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%.
The ATO will notify individuals when it has applied the 20% reduction to their loan account. The notification will be sent via SMS, email or their myGov Inbox. Individuals must check that their contact details are up to date with the ATO to ensure they receive the notification.
Read the Frequently Asked Questions for more information.
20% reduction - Frequently Asked Questions
This builds on the changes to make HELP and student loan repayments fairer. Details are available at Making student repayments fairer.