The Australian Government will cut 20% off all VET Student Loan debt as at 1 June 2025, before indexation is applied, to reduce the debt burden for Australians with a student loan.
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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 debt by 20%.
When will I see my 20% reduction on my VET Student Loan (VETSL) Debt?
The ATO will retrospectively apply the 20% reduction to your debts dated 1 June 2025 or earlier and the indexation that was applied will also be adjusted.
Some students may not see the reduction until later in the year. This is because your provider needs to report your enrolment and course data before the reduction can be applied. While the debt reduction is being processed, you may not be able to see your VET Student Loan debt on your ATO account.
What if my VETSL 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 will the 20% reduction be calculated?
The Government will reduce your VETSL debt amount that is outstanding at 1 June 2025 by 20%.
You can check how your VET Student Loan debt may be reduced by using the HELP debt reduction and repayment estimators - Department of Education, Australian Government.
How will indexation be applied?
Indexation is applied to outstanding student debt by the Australian Taxation Office (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 will retrospectively apply the 20% reduction to your debt as at 1 June and the indexation that was applied will also be adjusted to reflect your new lower 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% will retrospectively apply to the $10,000 debt leaving you with an outstanding balance of $8,000. The indexation you received will also be 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 not need to do anything to receive the 20% reduction.
The ATO will retrospectively apply the 20% reduction to your debt and the indexation that was applied will also be adjusted.
Will I receive a notification of my updated HELP debt?
The Government will communicate when the 20% debt reductions have been applied. You will be able to check your HELP and other student loan debt via myGov. Find out how to link your account to the ATOs Online Services at View your loan account online | Australian Taxation Office.
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 debt is applied, your available HELP balances will be re-credited by the amount of the reduction you received against your VSL debts. 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 VETSL debt?
If you have repaid your outstanding student loans and don’t have a student loan debt balance as at 1 June 2025, you will not receive the 20% loan reduction. The reduction will only apply to outstanding debt balances as at 1 June 2025.
How can I find details of my outstanding HELP and other student loan debts?
You can check your HELP and other student loan debt via myGov. Find out how to link your account to the ATOs Online Services at View your loan account online | Australian Taxation Office.
What other student loans are included in this change?
As well as VET Student Loans (VETSL) 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 please visit 20% reduction of student loan debt - Department of Education, Australian Government.
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 - Department of Education, Australian Government for more information.