News and updates for VET Student Loans students, including important changes to your student loan.
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Changes to indexation of VET Student Loans
Indexation is applied to your VET Student Loan debt on 1 June each year.
The Australian Government has made changes to the way indexation is applied to VET Student Loans (and other loan schemes).
The change has capped the rate of indexation to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) for that year. This ensures indexation does not cause debts to grow at a rate higher than the growth in wages.
The measure has been backdated to apply from 1 June 2023. This means if you had an outstanding VET Student Loan that was indexed on 1 June 2023, and/or 1 June 2024, then it is likely you will receive an indexation credit.
For indexation that was applied on 1 June 2023, the new calculation for indexation reduced the previous rate of 7.1% down to 3.2%.
For indexation that was applied on 1 June 2024, the new calculation for indexation reduced the previous rate of 4.7% down to 4.0%.
The Australian Taxation Office (ATO) is applying indexation credits to student loan accounts. There is no need for you to do anything.
You can check your estimated credit amounts for 2023 and 2024 by using the HELP debt reduction and repayment estimators.
Note: The HELP debt reduction and repayment estimator on the Department of Education webpage is for illustrative purposes only. Results from the HELP debt reduction and repayment estimator are not a formal estimate or assessment of your current or historical HELP loan, nor of the estimated credit. This will be calculated by the ATO.
Changes to loan repayments
On 2 November 2024, the Australian Government proposed changes to the repayment system for all Australians with a student debt, including VET Student Loans. Subject to the passage of legislation, the Government would introduce a new minimum repayment threshold and marginal rates of repayment which would take effect from 1 July 2025.
When legislated, the minimum compulsory repayment threshold would change from $54,435 in 2024-25 to $67,000 in 2025-26. This increases the amount you could earn before you are required to start repaying your loan.
This change will also introduce a marginal repayment rate system. Current repayment rates are set as a proportion of total income. Under the new marginal repayment system, repayments would only be calculated based on the portion of a person’s income above the new $67,000 threshold.
Table 1: Proposed repayment thresholds
| Income thresholds | Marginal rate of repayment |
|---|---|
| Below $67,000 | Nil |
| Income above $67,000 to $124,999 | 15c for each dollar over $67,000 |
| Income above $125,000 | $8,700 plus 17c for each dollar over $125,000& |
These changes, when legislated, will apply to anyone who has a student loan debt, including all VET Student Loans, Australian Apprenticeship Support Loans, HELP and other income contingent loans.
20% reduction to student loan debt
On 3 November 2024, the Australian Government proposed to reduce student loan debts by 20% in 2025. Subject to the passage of legislation, the Australian Taxation Office (ATO) would automatically apply the reduction from 1 June 2025 to all VET Student Loans, Australian Apprenticeship Support Loans, HELP and other income contingent loan accounts.
This means, if you have an outstanding VET student loan debt on 1 June 2025, your debt may be reduced by 20%.
You can check how your VET Student Loan debt may be reduced by using the HELP debt reduction and repayment estimators.
Note: The HELP debt reduction and repayment estimator on the Department of Education webpage is for illustrative purposes only. Results from the HELP debt reduction and repayment estimator is not a formal estimate or assessment of your current or historical HELP loan, nor of the estimated credit. This will be calculated by the ATO.