Update for VET students on historic loan records

Update to VET students seeing historical loan amounts now appearing on their ATO record.

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In early August 2022, some historical VET FEE-HELP (VFH) and VET Student Loan (VSL) loan records appeared on students’ Australian Taxation Office (ATO) records due to an IT system update.

These loan records relate to study undertaken between 2017 and 2022, with the vast majority relating to study undertaken in 2017.

The department notified all affected students and training providers in September 2022. We have investigated avenues to address any unintended outcomes for students as a matter of priority.

Additional information and support measures for affected VET students

Additional support measures to assist affected VET students have been decided. The options and next steps will vary depending on how different students are affected by the historical loans still pending or now appearing on their ATO record.

VFH Student Redress Measures have been extended by 12 months.

You now have until 31 December 2023 to apply to the VFH Student Redress Measures. If youdon’t know why you have a VFH loan, or believe you were impacted by inappropriate conduct by your educational provider you can contact the VET Student Loans - Commonwealth Ombudsman (VSLO). The VSLO will assess whether all or part of your VFH student loan should be re-credited under the VFH Student Redress Measures.

Historical indexation will be waived for affected VFH students

Indexation applies to unpaid loans once the debt is over 11 months old. This is applied on 1 June each year and can be viewed on your ATO online account.

A decision has been made that all historical indexation which had been applied to delayed VFH loans should be waived before you need to lodge your next tax return for the 2022-23 financial year. The indexation waiver for the delayed loan should be applied to your ATO account so you are not financially disadvantaged by this delayed loan transfer. No action is required from you.

Repayments on your loan amounts will only commence once you reach the income threshold ($48,361 for the income year 2022-23). The next indexation amount will not be applied to your loan until 1 June 2023.

Further historical records

The department has now identified further historical student loan records that are still pending in its IT systems. These loans have not yet been transferred to students’ ATO records. We are currently in the process of identifying affected students and determining the best way to address any unintended impacts. Once this is complete, we will be contacting affected students directly. The additional support measures outlined above will also apply to these students.

An independent review into these IT issues is currently underway.

Students with a VET Student Loan

For students with a VET Student Loan, our investigation showed that no historical indexation has been applied to your affected loan records nor will any historical indexation be applied to any VSL loans students have pending in the system once they are released to the ATO. This is because the effective date is the date when the loan was assessed in our IT system rather than the census date (for example, 22 July 2022).

Repayments on your loan amounts will only commence once you reach the income threshold ($48,361 for the income year 2022-23). You will also need to pay any future indexation. The next indexation amount will not be applied to your loan until 1 June 2023.

What to do if you are facing hardship

If you have reached the income threshold to begin repaying your loan and believe that making your repayments would cause you serious hardship, or there are other special reasons that make it fair and reasonable to defer making your compulsory repayment, you can apply for a deferral to the ATO. Further information is at Defer or amend your compulsory repayment or overseas levy | Australian Taxation Office (ato.gov.au).

For more information about your ATO loan accounts and how to manage them, please refer to:

Next steps

No action is required from you. The department will contact all affected students individually to provide further details about the next steps and support measures available.

Please continue to check this website for the latest advice.

Contacting the department

If you have any further queries about this matter, please contact the VET Student Loans Team via the online enquiry form.

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