What’s new

Fairer 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), to make loans fairer and provide cost of living relief to individuals with an outstanding loan.

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 will ensure indexation will 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 make repayments fairer

On 2 November 2024, the Australian Government proposed changes to the repayment system to make it fairer for all Australians with a student debt, including VET Student Loans.

The proposed changes to the repayment system are subject to the passage of legislation and will take effect from 1 July 2025.

The minimum compulsory repayment threshold will change from $54,435 in 2024-25 to $67,000 in 2025-26. This increases the amount you can earn before you are required to start repaying your loan.

This change will also introduce a marginal repayment rate system where compulsory repayment will only be calculated on a person’s income above the new $67,000 threshold, rather than being based on a person’s total annual income.

Table 1: Proposed repayment thresholds

These changes will apply to everyone who has a student debt, including all VET Student Loans, Australian Apprenticeship Support Loans HELP and other student support loans.

20% reduction to student loan debt

On 3 November 2024, the Australian Government proposed to reduce student loan debts by 20% in 2025. This will provide significant relief for more than 3 million Australians by removing more than $16 billion in student debt. The reduction will be applied to all VET Student Loans, Australian Apprenticeship Support Loans HELP and other student support loan accounts.

The 20% reduction of student loan debt is subject to the passage of legislation.  Following the passage of legislation, the Australian Taxation Office will automatically apply the reduction from 1 June 2025. This means if you have an outstanding VET student loan debt on 1 June 2025 then 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.