The Australian Government’s Universities Accord (Cutting Student Debt by 20 per cent) Bill 2025 passed Parliament in July 2025. The legislation made Higher Education Loan Program (HELP) and student loan repayments fairer, and reduced student loan debt by 20%.
On this page:
20% reduction of student loan debt
The Australian Government’s legislation to reduce student loan debt by 20% has been applied. The Australian Taxation Office (ATO) has completed processing the reductions.
The one-off 20% debt reduction measure benefited over 3 million Australians with a student loan debt and removed over $16 billion in HELP and other student debt.
This measure recognised that many Australians are doing it tough and it took pressure off the costs that Australians have to budget for.
It particularly helped younger Australians, with around 70% of people repaying a HELP debt being 35 or younger.
Indexation cap
In the May 2024 Budget, the Australian Government announced changes to HELP indexation to be based on the lower of Consumer Price Index (CPI) or Wage Price Index (WPI), with effect from 1 June 2023. This ensures that indexation will never be higher than the changes in wages.
The indexation rate applied on 1 June 2023 of 7.1% was reduced to 3.2% and the indexation rate applied on 1 June 2024 of 4.7% was reduced to 4%.
The ATO automatically applied the indexation credits to eligible individuals’ HELP accounts.
Making student repayments fairer
The Australian Government made the HELP and student loan repayment system even fairer by changing the repayment system and increasing the amount people can earn before they are required to start repaying their loan.
The minimum repayment threshold changed from $56,156 to $67,000 in 2025-26.
This change also introduced a system where HELP repayments are calculated only on the income above the new $67,000 threshold rather than on total annual income.
| Income threshold | Marginal repayment |
|---|---|
| Below $67,000 | NIL |
| Income above $67,000 to $124,999 | 15c for each dollar over $67,000 |
| Income above $125,000 | $8,700 plus 17c for each dollar over $125,000 |
You can find out the impact on your compulsory repayments in 2025-26 based on your projected annual income by using the Making Repayments Fairer Estimator.
This new repayment system means that people will only have to make student loan repayments when they can afford to do so.
Who benefited?
Anyone with one of the following student loans benefited 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 Loan
- Student Financial Supplement Scheme