News and updates for VET Student Loans students, including important changes to your student loan.
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20% reduction to student loan debt
The Australian Government is progressing the 20% reduction of student loan debt as at 1 June 2025. This measure is subject to the passage of legislation over the coming months.
Once legislation passes, if you have an outstanding student loan debt balance as at 1 June 2025, the Government will reduce your outstanding debt by 20%. You do not need to do anything to receive the 20% reduction. The Australian Taxation Office (ATO) will automatically apply the 20% reduction to your loan debt account.
If you are considering making a voluntary repayment to your loan debt before 1 June 2025, you should first consider seeking financial advice. When making your decision you may want to consider the proposed change to reduce your loan balance as at 1 June 2025 by 20%. Making a voluntary repayment after 1 June 2025 will maximise the impact of your repayment and result in a greater reduction of your student loan debt.
For more information visit FAQs - 20% reduction off all outstanding HELP loan debt.
You can check how your VET Student Loan debt may be reduced by using the HELP debt reduction and repayment estimators.
Note: The HELP debt reduction and repayment estimator on the Department of Education webpage is for illustrative purposes only. Results from the HELP debt reduction and repayment estimator is not a formal estimate or assessment of your current or historical HELP loan, nor of the estimated credit. This will be calculated by the ATO.
Making student loan repayments fairer
The Australian Government has announced it will change the repayment system and increase the amount people can earn before they are required to start repaying their student loan. Subject to the passage of legislation, the minimum compulsory repayment threshold would change from $54,435 in 2024-25 to $67,000 in 2025-26. This increases the amount you could earn before you are required to start repaying your loan.
This change will also introduce a marginal repayment rate system. Current repayment rates are set as a proportion of total income. Under the new marginal repayment system, repayments would only be calculated based on the portion of your income above the new $67,000 threshold, rather than being based on total annual income.
Table 1: Proposed repayment thresholds
| Income thresholds | Marginal rate of 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 |
These changes, when legislated, will apply to anyone who has a student loan debt, including all VET Student Loans, VET FEE-HELP, Australian Apprenticeship Support Loans, HELP and other income contingent loans.
For further information visit Making HELP and student loan repayments fairer - Department of Education, Australian Government.
Changes to indexation of VET Student Loans
Indexation is applied to your VET Student Loan debt on 1 June each year.
The Australian Government has made changes to the way indexation is applied to VET Student Loans (and other loan schemes).
The change has capped the rate of indexation to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) for that year. This ensures indexation does not cause debts to grow at a rate higher than the growth in wages.
The measure has been backdated to apply from 1 June 2023. This means if you had an outstanding VET Student Loan that was indexed on 1 June 2023, and/or 1 June 2024, then it is likely you received an indexation credit.
For indexation that was applied on 1 June 2023, the new calculation for indexation reduced the previous rate of 7.1% down to 3.2%.
For indexation that was applied on 1 June 2024, the new calculation for indexation reduced the previous rate of 4.7% down to 4.0%.
The Australian Taxation Office (ATO) is applying indexation credits to student loan accounts. There is no need for you to do anything.
You can check your estimated credit amounts for 2023 and 2024 by using the HELP debt reduction and repayment estimators.
Note: The HELP debt reduction and repayment estimator on the Department of Education webpage is for illustrative purposes only. Results from the HELP debt reduction and repayment estimator are not a formal estimate or assessment of your current or historical HELP loan, nor of the estimated credit. This will be calculated by the ATO.