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The Australian Government has made a change to reduce student loan debt for more than 3 million people who have a Higher Education Loan Program (HELP) loan or other Australian Government student loan.

Change to indexation

The Government has made a change to the way indexation is calculated for Australian Government student loans.

Indexation is applied annually to an individual’s outstanding student loan debt as an adjustment to the balance to reflect changes in the cost of living. This adjustment is applied on 1 June each year.

In recent years there have been large increases in the CPI, which resulted in a student loan indexation rate of 7.1 per cent in 2023 and 4.7 per cent in 2024.

Lower of Consumer Price Index or Wage Price Index

Following the change, the indexation rate is now determined by the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). This change ensures that student loan debts will never grow faster than the average wage.

Consumer Price Index (CPI)

The CPI is an economic indicator which measures changes in the prices of goods and services purchased by households across the country.

Wage Price Index (WPI)

The WPI is an economic indicator which measures changes in the price of wages and salaries in the Australian labour market.

Change will reduce student loan debt

The change to indexation applies retrospectively from 1 June 2023. This means the indexation rate that was applied to loans in 2023 and 2024, has been reduced to the WPI rate, instead of the higher CPI rate.

For 2023 the indexation rate has reduced from 7.1 per cent to 3.2 per cent, and for 2024 the indexation rate has reduced from 4.7 per cent to 4.0 per cent.

This means student loans that were subject to the spike in indexation rate in 2023 and 2024 are receiving an indexation credit.

The Australian Taxation Office (ATO) is automatically applying this change to outstanding student loans.

Impacts to existing Australian Government student loans

If you had an Australian Government student loan on or after 1 June 2023, your student loan balance is being reduced. This change will apply to:

  • Higher Education Loan Program (HELP) loans
  • Vocational Education and Training (VET) Student Loans
  • Australian Apprenticeship Support Loans
  • other student support loan accounts.

Reducing the amount you owe

The student loan relief (or indexation credit) you may receive depends on your outstanding student loan amount on 1 June 2023 and 1 June 2024.

The ATO is calculating the lower indexation rates for these years and applying a credit to your student loan account , reducing the amount you owe.

If you repaid your student loan after 1 June 2023, you may receive an indexation credit as a refund to your nominated bank account as recorded by the ATO (assuming you have no outstanding tax debts).

Check your student loan balance

For instructions on how to check your student loan account in myGov, visit the ATO website .

On 2 and 3 November 2024, the Australian Government announced proposed changes to student loans, including a 20 per cent reduction in student debts and changes to the way loans are repaid. These changes are subject to the passage of legislation.