All student loans will be reduced by 20% and repayment amounts lowered to make repayments fairer and help students with cost of living relief. The reforms will deliver:
- A one-off 20% reduction in HELP and student loan balances, effective from 1 June 2025. Someone with the average Higher Education Loan Program (HELP) debt of $27,600 will see around $5,520 wiped from their outstanding student loan.
- Lower repayment amounts, under a new marginal repayment system making it easier to manage other living expenses.
- Higher income thresholds, increasing how much people can earn before repayments are required, allowing graduates to keep more of their earnings. The new repayment threshold will change from $54,435 to $67,000.
The Australian Taxation Office will retrospectively apply the 20% reduction to all student loans. The indexation that was applied on 1 June 2025 will also be adjusted.
This builds on the government's action last year to cap the indexation rate on HELP and other student loans to the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) and applied that change to retrospectively apply from 1 June 2023.
These changes apply to all Higher Education Loan Program (HELP) and other student loans including VET Student Loans (VSL), Australian Apprenticeship Support Loans and Student Startup Loans (SSL).
Minister for Education, the Hon Jason Clare MP said:
"We promised we would cut your student debt by 20 per cent and we have delivered.
"This is a big deal for 3 million Australians.
"This will save millions of Australians thousands of dollars.
"The average student debt today is $27,600, this will cut that debt by $5,520.
"Just out of uni, just getting started, this will take a weight off their back.
