Students with Higher Education Loan Program (HELP debt) and other student loans which are subject to annual indexation will have their balances reduced under a cost-of-living measure announced in the 2024–25 Budget. A Bill to implement the measure has been passed by parliament and received assent on 5 December 2024.

Previously, the Consumer Price Index (CPI) was used to calculate the indexation rate. The reduction in indexation backdates to 1 June 2023 and applies to loan balances for the 2023–24 income year onwards. The debt relief also applies to apprentices with outstanding debts through the VET Student Loan program or Australian Apprenticeship Support Loan. The measure is part of wider university reforms announced by the Labor government to help cost-of-living pressures and promote better education opportunities.

Annual indexation rise

Every June, the HELP and other student debts were indexed in line with CPI, this measure caps the indexation at the lower of the CPI or the Wage Price Index (WPI).

The indexation rate applied on 1 June 2023 was 7.1% and under the new law, this has reduced to 3.2% retrospectively.

The indexation rate applied on 1 June 2024 was 4.7% and under the new law, this has reduced to the WPI figure of 4.0%.

Savings for students

Since the previous year’s indexation rise of 7.1% is lowered to 3.2% under the policy, you can expect the difference in the rates to reduce your outstanding student loan balance. The ATO will automatically apply a credit for the difference between the current indexation rate and the new indexation rate to your loan, as soon as possible.

For example, a student with a HELP debt of $26,500 as at 1 June 2023, following the changes enacted, is eligible to receive credit of $1,190 across the 2023 and 2024 income years and a total debt reduction of $1,600 over the total life of the loan.

Next steps

You can expect a credit to your loan balance very soon. You can find out how much credits you will receive using the HELP Indexation Credit Estimator on the Department of Education website.

If you have completely repaid your HELP debt after the 2023 or 2024 indexation was applied, the credit will be refunded to your bank account if there are no outstanding tax debts. You should make sure ATO has the correct bank details on file to receive the refund.

If your loan balance is less than the expected credit to be applied, you can hold off paying the balance as the credits will wipe out the debt. Any additional credits will be refunded to your nominated bank account.

Contact us

Please free to contact our office should you have any queries in relation to this measure.