Study and training loan repayment changes

Study and training loan repayment changes
There have been a few changes and announcements on study and training loans of late and the ATO has provided an update of what is changing and when.

Retrospective indexation reduction

​The HELP indexation rate will be changed to be the lower of either the consumer price index (CPI) or wage price index (WPI).

The amending legislation, Universities Accord (Student Support and Other Measures) Bill 2024, passed both Houses on 26 November 2024, and awaits Royal Assent.

The relief will be backdated and applied automatically with an adjustment to loan balances for both the 2023 and 2024 income years, where the lower WPI rate will be applied instead of CPI.

Proposed repayment thresholds

The Government has proposed changes to the minimum repayment threshold to be increased from $54,435 in 2024-25 to $67,000 in 2025-26.

HELP repayments will only be calculated on the income above the new $67,000 threshold instead of the total annual income.

Proposed 20% debt reduction

The Government has announced its intention to reduce the balance of all study and training support loans by 20%, to take effect before 1 June 2025.

These changes are subject to the passage of amending legislation.

Rural doctors and nurses HELP debt eliminated

An initiative introduced in 2022 encourages doctors and nurse practitioners to live and work in rural, remote or very remote areas of Australia. The changes allow doctors and nurses to reduce their HELP loans if they complete the required amount of eligible work in specified remote areas.

The ATO has also updated its website guidance with the 2024-25 repayment thresholds for compulsory repayments on study and training loans.

More information:

• Study and training loan repayment thresholds and rates
• Study and training loans – what’s new

If you have any questions about any of the above, give us a call on 03 8805 8000.