On 23 July 2025, the Federal Government introduced a Bill aimed at delivering on its election commitment to ease the burden of student debt for Australians. The proposed legislation includes a number of key reforms to the Higher Education Loan Program (HELP) and other eligible student loan arrangements:
- A one-off 20% reduction will apply to HELP and certain other student loan balances incurred on or before 1 June 2025.
- The minimum repayment threshold will rise from $54,435 (in 2024–25) to $67,000 (in 2025–26).
- A marginal repayment system will be introduced, ensuring that compulsory repayments apply only to income earned above the $67,000 threshold, rather than being calculated as a flat percentage of the total repayment income.
These measures build on changes made in the previous Parliament, which limited indexation of student loans to the lower of the Consumer Price Index (CPI) or Wage Price Index (WPI). This ensures that the indexation applied to outstanding debts will never outpace wages growth.
Importantly, the new $67,000 repayment threshold will be indexed annually from the 2026–27 income year onwards, but again, will not increase faster than wages.
These proposed reforms are expected to reduce the long-term repayment burden for many Australians and improve fairness in the student loan system.
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