You know those days where you open your MyGov account, accidentally look at your HELP debt balance, and feel like you’ve just aged 40 years in 3 seconds?
For those with student loans you’ll know what we’re talking about.
HELP debts and other student loans are increased by CPI each year and in 2023 due to high inflation they took a massive leap… 7.1% in fact.
Well, it looks like this is going to be unwound.
I know, we’re as shocked as you are.
Turns out, the government is going to cap how much they can jack up your loan each year. From now on, your study debt will only go up by whichever is lower—CPI (inflation) or wage growth. So if your pay’s going nowhere (hello, my accounting career in 2006), your HELP debt won’t go galloping off into the distance either.
But wait there’s more…
Yep. They’re making the change retroactive to June 2023. So, everyone who got smacked with that nasty 7.1% indexation increase, there’s a good chance you’ll get some of it back.
Anyone for some steak knives? Yes, that’s right, there’s more.
Not only is the government winding back this increase, but they are also going to clip 20% off all Student loans. Yep. Automatically. No forms. No Centrelink queues. No listening to hold music while questioning your life choices.
If you owe $30,000, that’s $6,000—gone.
This is a one-off reset that’ll benefit around 3 million Aussies and remove $16 billion of collective student debt. Probably the only time you’ll want to hug your ATO statement.
Surely there’s not more?
Yep. They are also lifting minimum repayment thresholds from $54,435 to $67,000. That means if you earn less than $67,000, no annual repayment required.
So, what do I need to do?
Nothing. The ATO will handle everything. The debt reduction hits before indexation kicks in on 1 June 2025. So your new, improved, less-stressful balance will just quietly appear in your account like a friendly ghost of fiscal past.
If you’re thinking of throwing some cash at your HELP debt before 1 June, maybe hold that thought—and your money. With the 20% discount and indexation tweak about to kick in, it’s probably worth waiting to let the ATO do their magic first.
Final Thoughts
We’re as surprised as anyone that the ATO is wiping off your debt. But if it applied to you, take it as a win.
So here’s to less debt, less indexation, and one fewer reason to avoid your MyGov login
Now if only they’d forgive that speeding fine from 2007…
Please note that these changes have not been legislated yet, however given the government has remained in place, it is almost certain to be legislated.
As always, reach out to our team for any assistance, or find more details on the ATO website here.
Disclaimer: This article is here to give you general info only, not professional advice specific to your unique situation. While efforts are made to ensure accuracy, the content may change over time. We can’t take responsibility for any decisions based on the contents of this article, so be sure to chat with your accountant or advisor first!
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