The Government has passed the Universities Accord (Cutting Student Debt by 20%) Act 2025 to reduce all student and training support debt by 20%. The ATO has commenced processing the 20% reduction to all VET Student Loan debt as at 1 June 2025, before indexation is applied.
On this page:
Does the 20% reduction apply to me?
If the census date for your study was on or before 1 June 2025, the Government will reduce your outstanding student debt by 20%.
When will I see my 20% reduction on my VET Student Loan debt?
You can view your balance on the Australian Taxation Office (ATO) app or online service.
Some students may not see the reduction until later this year, or early 2026. Your provider needs to report your enrolment and course data before the reduction can be applied. While the student loan debt reduction is being processed, you may not be able to see your VET Student Loan debt on your ATO account.
What if my VET Student Loan debt for recent study is not showing on my ATO account by 1 June 2025? Will it be reduced by 20%?
If the census date for your study was on or before 1 June 2025, you will receive the reduction.
How is the 20% reduction calculated?
The 20% reduction is applied to your study loan balance as at 1 June 2025, before indexation was applied. The 2025 indexation will be re-calculated on the reduced loan amount.
You can check how your VET Student Loan debt may be reduced by using the HELP debt reduction and repayment estimators on the Department of Education website.
How will indexation be applied?
Indexation is applied to outstanding student debt by the ATO on 1 June each year. This is the law and an automatic part of student loan administration.
On 1 June 2025, indexation of 3.2% was applied in the normal way to all student debt. This 3.2% has been calculated using the lower of the Consumer Price Index and the Wage Price Index as at 1 June 2025. This figure is calculated by the ATO based on information published by the Australian Bureau of Statistics and is part of the normal annual indexation process that maintains the value of student debt in real terms.
The ATO has retrospectively applied the 20% reduction to your student debt as at 1 June. The indexation that was applied has also been adjusted to reflect your new lower student loan debt.
For example, if your debt was $10,000 on 1 June 2025, it will be indexed at 3.2% ($320). Leaving you with a debt of $10,320. The 20% reduction has been retrospectively applied to the $10,000 debt leaving you with an outstanding balance of $8,000. The indexation you received has also been reduced from $320 to $256 to reflect the 20% reduction, leaving you with a debt of $8,256.
Do I need to do anything to get the 20% reduction?
You must ensure you have correctly reported your enrolment details to your provider. If you are still studying and accessing a VET Student Loan, make sure you continue to meet your loan obligations such as completing your progression forms.
If your provider has correctly reported your enrolment and course data to the department, you will receive the 20% reduction.
The ATO has retrospectively applied the 20% reduction to your student debt and the indexation that was applied has also been adjusted.
Will I receive a notification of my updated HELP debt?
Your loan balance as at 1 June reflects 20% reduction. You can view your balance on the ATO app or online services.
How will my HELP balance be affected as a result of the debt reduction?
Your HELP balance is your HELP loan borrowing limit of that given year. This balance will take into consideration any HECS-HELP, FEE-HELP, VET FEE-HELP and VET Students Loans debt you already have.
When the reduction of your student debt is applied, your available HELP balances is re-credited by the amount of the reduction you received against your VET Student Loan debt. Therefore, you can re-borrow from your HELP balance for further study in the future once the reduction and re-credit have both been processed by the ATO.
Your HELP balance will increase as if you had made a repayment to the ATO. You can check your current HELP loan balance by logging on to the myHELPbalance portal.
What if I have already paid off my VET Student Loan debt?
If you have repaid your outstanding student debt and don’t have a student debt balance as at 1 June 2025, you will not receive the 20% reduction. The reduction is only applied to outstanding student debt balances as at 1 June 2025.
How can I find details of my outstanding HELP and other student loan debts?
You can view the balance of your loan using the ATO app or online services.
What other student loans are included in this change?
As well as VET Student Loans the changes will affect all of the following student loans:
- HECS-HELP
- FEE-HELP
- STARTUP-HELP
- SA-HELP
- OS-HELP
- Australian Apprenticeship Support Loans
- Student Start-up Loan
- Student Financial Supplement Scheme
For students with the above loans, more information is available at 20% reduction of student loan debt on the Department of Education website.
Making student loan repayments fairer
VSL students who have further questions about the changes to the compulsory repayments threshold can visit FAQs - Making students repayments fairer on the Department of Education website for more information.