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What does the proposed changes to HELP loans mean?

If you are one of the millions of Australians with Higher Education Loan Program (HELP) debt, the proposed changes may offer some benefit.

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The most significant changes is a one-off 20% reduction in all HELP debts. This reduction would be automatically applied by the ATO before the annual indexation on 1 June 2025. For example, if you have a HELP balance of $27,600, you could expect a reduction of approximately $5,520 in your debt.

In addition, the minimum income threshold for making compulsory HELP repayments is proposed to increase from $54,435 to $67,000.

Another crucial change will be the indexation rate will be the lower of either the consumer price index (CPI) or the wage price index (WPI). This adjustment will be backdated on all existing HELP, VET student loans, and other similar accounts from 1 June 2023.

 

 

 

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Article Date: March 18, 2025

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W Marshall & Associates 64 Jolimont Street, East Melbourne VIC 3002

Important: This is not advice. Clients should not act solely on the basis of the material contained in this Commentary. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before taking any action. The Commentary is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.