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)
- Repayments now only apply to income above this threshold (marginal repayment system), instead of the entire repayment income. (ato.gov.au)
- Repayment rates for 2025–26: • 15¢ for each dollar $67,001 to $125,000 (ato.gov.au) • $8,700 + 17¢ for income $125,001 to $179,285 (ato.gov.au) • 10% on the total income if above $179,286 (ato.gov.au)
- The 20% reduction to all loan balances as at 1 June 2025, before indexation, is now law. Recrediting will follow. (ato.gov.au)
Who is affected and how
- Individuals earning $67,000 or less annually are now exempt from compulsory repayment. (ato.gov.au)
- 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)
- 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)
- These tables go live from 24 September 2025 for Schedule 8 and scanning forward. (softwaredevelopers.ato.gov.au)
- Indexation rate changes: CPI or WPI (whichever is lower) applied to loan balances. Backdated for June 2023 & June 2024. (ato.gov.au)
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.