If you are one of the millions of Australian with Higher Education Loan Program (HELP) debt, the proposed changes may offer some benefit.
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The most significant changes is a one-off 20% reduction in all HELP debts. This reduction would be automatically applied by the ATO before the annual indexation on 1 June 2025. For example, if you have a HELP balance of $27,600, you could expect a reduction of approximately $5,520 in your debt.
In addition, the minimum income threshold for making compulsory HELP repayments is proposed to increase from $54,435 to $67,000.
Another crucial change will be the indexation rate will be the lower of either the consumer price index (CPI) or the wage price index (WPI). This adjustment will be backdated on all existing HELP, VET student loans, and other similar accounts from 1 June 2023.
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