Fairer indexation of VET Student Loans

The Government has announced changes to the way VET Student Loans will be indexed, effective from 1 June 2023, subject to the passage of legislation.

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On 5 May 2024, the Government announced changes to reduce the indexation that is applied to VET Student Loans to make loans fairer and provide cost of living relief to individuals with an outstanding loan. 

In response to the Australian Universities Accord, the Government will cap indexation of VET Student Loans to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI). This will ensure indexation will not cause debts to grow at a rate higher than growth in wages.

The measure will be backdated to apply from 1 June 2023. This means if you have an outstanding VET Student Loan that has been indexed on 1 June 2023 and/or will be indexed on 1 June 2024 then you will receive indexation credit following the passage of legislation. 

For the 2023 year the new calculation for indexation will reduce the previous rate of 7.1 per cent to 3.2 per cent, which is the lower WPI amount. 

The indexation rate to be applied on 1 June 2024 is projected to be 4.7 per cent and will be reduced to 4.0 per cent. 

Amendments to relevant legislation (VET Student Loans Act 2016 and Higher Education Support Act 2003) are required to give effect to capping indexation on VSL loans at lower of either CPI or WPI.

Once legislation is passed, the Australian Taxation Office will apply indexation credits to an individual’s ATO loan account and there is no need for you to request an indexation credit.

If you have an outstanding VET Student Loan debt and would like to check the estimated indexation credit amount for 2023 and 2024 that could be applied to your loan debt, then please use the HELP indexation credit estimator. 

Higher Education Loan Program (HELP) - Indexation Credit Estimator - Department of Education, Australian Government 

Note: The HELP indexation credit estimator, developed by the Department of Education, can be used to check the estimated credit amount for income contingent loans, including your VET Student Loan. It is an indicative amount of the indexation credit that you will receive when legislation is passed. It does not constitute a formal estimate or assessment of your current VET Student Loan.