20% reduction of student loan debt, ease the pressure of living costs
On 3 November 2024 the Australian Government announced it will reduce every Australian’s HELP or student loan debt by 20%.
This builds on the changes to make HELP and student loan repayments fairer that the Government announced on 2 November 2024. Details of this announcement are available at Making student repayments fairer.
This one-off 20% debt reduction measure will benefit 3 million Australians with a student loan debt. This will remove $16 billion in HELP and other student debt.
This is in addition to the $3 billion in debt that will be removed through the Government’s changes to cap the indexation applied to student loans to be either the lower of the Wage Price Index or the Consumer Price Index, backdated to 2023 – meaning that indexation will never be higher than the changes in wages.
The indexation and debt reduction measures reduce total HELP and other student loan debt by nearly $20 billion.
Why is this changing?
Reducing HELP and other student loan debts by 20% means Australians will have less student debt to pay back.
This measure recognises that many Australians are doing it tough and will take pressure off the costs that Australians have to budget for.
It will particularly help younger Australians, with around 70% of people repaying a HELP debt being 35 or younger. This is a critical time for saving, considering first home buying and supporting or starting a family.
Who will benefit and how?
Anyone with one of the following student loans will benefit from these measures:
- any of the HELP loans, including HECS-HELP, FEE-HELP, STARTUP-HELP, SA-HELP, OS-HELP
- VET Student Loans
- Australian Apprenticeship Support Loans
- Student Start-up Loan
- Student Financial Supplement Scheme
What happens next?
Following the passage of legislation, the Australian Taxation Office (ATO) will apply the one-off 20% reduction to an individual’s HELP or student loan account balance, before indexation is applied on 1 June 2025.
This means that indexation would apply only to the remaining loan debt balance e.g. after the HELP debt has been reduced by 20%.
This will be automatically done by the ATO.
To find out more go to 20% reduction off all student debt fact sheet.
This builds on the changes to make HELP and student loan repayments fairer that the Government announced on 2 November 2024. Details of this announcement are available at Making student repayments fairer. (DOE)
