Hey there! I heard the government promised to reduce HECS loan balances by around 20% – when will these changes occur and do I need to do anything?
7,789 views
7,789 views6 replies
6 replies
7,789 views
6 replies
Hey @TKumar,
You’re right! The government announced a proposed 20% reduction to study and training support loans that exist on 1 June 2025. They also proposed an increase to the minimum repayment threshold and changes to how repayments are calculated from 1 July 2025.
But these changes aren’t law yet. We’ll let you know as soon as the law has passed and when you can expect to see the reduction in your account. You don’t need to do anything for these changes to apply. Don’t wait until the law has passed to lodge your tax return – continue to lodge as normal!
You can find more info on the changes on the Department of Education website:
See our article Paying my HECS HELP student loan for more details on how study loans work.
All replies
Hey @TKumar,
You’re right! The government announced a proposed 20% reduction to study and training support loans that exist on 1 June 2025. They also proposed an increase to the minimum repayment threshold and changes to how repayments are calculated from 1 July 2025.
But these changes aren’t law yet. We’ll let you know as soon as the law has passed and when you can expect to see the reduction in your account. You don’t need to do anything for these changes to apply. Don’t wait until the law has passed to lodge your tax return – continue to lodge as normal!
You can find more info on the changes on the Department of Education website:
See our article Paying my HECS HELP student loan for more details on how study loans work.
Hey LucyATO,
Thank you so much! this is super helpful and the answer really clears it up for me.
Ill wait for it to be passed as law but in the meantime ill lodge as normal.
Thanks once again!
If my debt is currently $24,000 (after June 1 indexation, but before 20% reduction in debt), and end-of-year compulsary payments by my employer will total $21,700. The remaining balance will be reduced to below $0 once the 20% reduction is in place.
If i was to lodge my tax return BEFORE the reduction has occured - this will result in the HELP debt not being entirely paid off with that tax return, and subsequently not being able to stop HELP payments for a whole 12 additional months - leaving me out of pocket approx ~$24,000 (or around $475 a week) until July 2026, not something I can make work.
Would it not make sense for me to wait until the law has come in to lodge tax returns? The only other reasonable solution would be to stop HELP payments after July 1, with the knowledge that once the reduction has occured, I will be in credit and will receive the balance of the owed moneys to me come July 2026.
Hey @OdieAO,
It seems like you'll need both your compulsory repayment (via your 2025 tax return) and the 20% reduction to be applied before your loan is fully paid off.
There's no need to wait until the 20% reduction is applied before lodging your tax return.
Once your loan is paid off, you can let your employer know that you no longer have a study loan by completing a withholding declaration. You can do this at any time. Usually, your employer will action it the following pay. This will help minimise withholding and anything extra will be refunded to you next tax time!
Provided this is legislated, what would happen if you were to pay your HELP debt in full after 1 June 2025. Would you still receive a refund of 20% of what was owing at 1 June 2025?
Hi @Tribe,
The proposed legislation is to reduce outstanding HELP and student loan debts as of 1 June 2025 (before indexation). So that means if you make a voluntary repayment after 1 June 2025, you still receive the reduction on the amount that was outstanding on 1 June 2025.
The Department of Education has several FAQs on this topic.
Featured articles
3 June 2026 · 3 min read time
13 May 2026 · 4 min read time
24 Aug 2025 · 3 min read time