Hi,
I am a second year student and I have searched and searched for information about avoiding indexation on my loans. However, there seems to be so much conflicting information and wording can be ambiguous.
I have paid the amount for my first semester from my first year through my ATO app, which is more than 11 months old and will be affected by indexation, but I haven’t paid the amount for my second semester from my first year, which is less than 11 months old. I made my voluntary repayment to avoid indexation on my first semester subject amount, but it doesn’t show which subjects were paid off on my statement. So I don’t know if I will be avoiding indexation?
I have seen information that discusses that the oldest subjects are paid off first, and other information that says that the only way to guarantee not to have indexation applied, is for my HELP balance to be $0 by 1 June.
Example using rounded figures:
Balance before voluntary repayment: $10000
Balance for first semester (from 2025, older than 11 months): $5000
Payment made: $6000
Remaining balance: $4000
Any clarification on whether I will be avoiding indexation this year will be appreciated, as I have paid off the required amount, plus a bit extra, for my more than 11 month old subjects.
Thank you
119 views
5 replies
Author: RachelATO(Community Moderator)Community Moderator 15 May 2026
Hi @Watermelon,
If the remaining $4,000 balance consists only of amounts that are less than 11 months old, then indexation shouldn’t be applied to your HELP debt this year.
Indexation only applies to amounts that have been unpaid for more than 11 months.
You’ve said the balance older than 11 months old is $5,000. In your case, a $6,000 repayment on a $10,000 balance leaves $4,000. Based on what you've said, that amount would be less than 11 months.
If any part of your balance is older, to fully avoid indexation your balance must be $0 by 1 June.
Voluntary repayments reduce your total HELP balance, not specific debts (we don't track indexation per subject or semester). Payments must be received and processed before 1 June (allow at least 4 business days) to reduce indexation.
You can check your balance and repayment history via the ATO app or myGov.
Hi,
Thank you for your reply, if my balance must be $0 by 1 June, does that mean that if my current subjects from this semester gets added in the next 2 weeks, that I will have to pay indexation on those subjects as well? Which are less than 11 months old as they are only a couple months old.
Thanks
Author: RachelATO(Community Moderator)Community Moderator 15 May 2026
Hi @Watermelon,
No, new subjects won’t be indexed this year. Only your older debt (if any remains) will be indexed, not anything added this semester.
To clarify, saying your balance must be $0 by 1 June is just a way of explaining how to fully avoid indexation.
If your balance isn’t $0, indexation doesn’t apply to everything. It only applies to the portion of your debt that’s been unpaid for more than 11 months.
We've answered some common questions about paying your student loan that might interest you.
