HELP and Student Loan Repayments Reform Now Law
The Australian Government has recently enacted significant reforms to the Higher Education Loan Program (HELP) and other student loan repayment structures, aiming to alleviate financial pressures on graduates and current students.
Key Changes Effective from 1 July 2025:
- Increased Repayment Threshold: The minimum income required for compulsory student loan repayments will rise from $54,435 to $67,000. This adjustment means that graduates will begin repaying their loans only when their earnings exceed this new threshold, allowing for greater financial flexibility in the early stages of their careers.
- Marginal Repayment System: Repayments will now be calculated solely on the income above the $67,000 threshold, rather than on the total annual income. This change ensures that repayment amounts are more closely aligned with an individual’s capacity to pay, reducing the financial burden on lower to middle-income earners. Australian Taxation Office
- 20% Reduction in Outstanding Student Loan Balances: In a move to provide immediate relief, the government has announced a 20% reduction in all outstanding HELP and other student loan debts. This reduction is set to take effect before 1 June 2025 and will automatically apply to existing loan balances, effectively decreasing the overall debt owed by students and graduates. Department of Education
These reforms are designed to make the student loan repayment system more equitable and manageable, reflecting the government’s commitment to supporting higher education participants.
For personalised advice on how these changes may impact your financial situation, or for assistance with tax planning and financial management, please contact Simmons Livingstone at 1800 618 800 or via email admin@simmonslivingstone.com.au
Our team is dedicated to helping you navigate these updates and optimise your financial well-being.
Note: All information is based on current legislation as of February 2025 and is subject to change. For the most up-to-date information, please refer to official government publications or consult with your financial advisor.
