Compliance
Managing Your Study Loan Repayments: New Thresholds and System Changes from July 2025–26
The income threshold for compulsory repayments has gone up, repayment rates have shifted to a marginal basis, and the 20% loan balance reduction has been backdated to 1 June 2025.
By NomadicTax Research Team • 5-8 min read • May 6, 2026
## What’s changed with study and training loan repayments?
- From **1 July 2025**, the compulsory repayment income threshold increased from ~$54,435 to **$67,000**. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
- Repayments now only apply to income **above** this threshold (marginal repayment system), instead of the entire repayment income. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
- Repayment rates for 2025–26:
• 15¢ for each dollar **$67,001 to $125,000** ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
• $8,700 + 17¢ for income **$125,001 to $179,285** ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
• 10% on the **total income** if above $179,286 ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
- The 20% reduction to all loan balances as at **1 June 2025**, before indexation, is now law. Recrediting will follow. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
## Who is affected and how
- Individuals earning **$67,000 or less** annually are now exempt from compulsory repayment. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
- Those earning above the upper threshold see relief under the marginal scale vs previous flat rate. E.g., someone earning $80,000 reduces repayment from previous ~$2,800 to ~$1,950. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
- Top earners (>$179,286) see no change in percentage (10%), but may benefit from lowered repayment contributions earlier.
## Additional updates you need to know
- Employers pay using **updated tax tables** and **Schedule 8 (NAT 3539)** with linear formulae y = a·x − b for withholding for those with loans. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/2025-pay-you-go-payg-withholding-tax-tables?utm_source=openai))
- These tables go live from **24 September 2025** for Schedule 8 and scanning forward. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/2025-pay-you-go-payg-withholding-tax-tables?utm_source=openai))
- Indexation rate changes: CPI or WPI (whichever is lower) applied to loan balances. Backdated for June 2023 & June 2024. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new?utm_source=openai))
## What to do now
- Log your current loan balance and see expected repayments under new regime.
- Update payroll info or seek advice if your employer prepares withholding based on old tables.
- If you expect significant income, plan for repayments ahead of budget changes.
**Bottom line:** The changes mean many borrowers will pay less, or no compulsory repayment, from 1 July 2025. But updated tax tables, thresholds, and legislative changes mean you’ll need to check what applies to your situation.