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VET Student Loans are subject to annual indexation. Indexation is when your loan balance is adjusted to reflect the changes in the cost of living.
When indexation is applied, your debt is likely to increase which means the amount you repay in total will be more than the original amount of the loan.
Indexation is applied on 1 June each year to debts that are 11 months or older. Indexation is applied in line with either the Consumer Price Index (CPI) or the Wage Price Index (WPI), whichever is the lesser.
Example
Sally undertook a full time Diploma from February 2023 to end of July 2024. She hasn’t made any repayments yet. Her loan debt is indexed each year as follows:
- 1 June 2023: no Indexation was applied, as no part of her debt was 11 months old.
- 1 June 2024: indexed at 4% for only the part of her debt that was 11 months old (first study period in 2023).
- 1 June 2025: indexed at 3.2% for the part of the debt that is over 11 months old.
- 1 June each year after – loan debt is indexed as per the indexation rate each year.
You can find current and past indexation rates at Study and training loan repayment thresholds and rates | Australian Taxation Office (ato.gov.au).
The VET Student Loans calculator at VSL Calculator | Your Career can help you understand what your initial debt amount will be. It will also show you how it may increase after 5 and 10 years if unpaid.