Tax Planning
The Study Loan Repayment Overhaul: What HELP-Debt Holders Need to Know
Australian study loan holders face a new income threshold and repayment approach from 1 July 2025, with reduced mandatory repayment burdens and a shift to marginal rates.
By NomadicTax Research Team • 5-7 min read • March 3, 2026
## What’s Changing in HELP and Training Loans Repayments
Starting **1 July 2025**, the compulsory repayment threshold for study and training support loans (like HELP) has been raised from **$54,435** to **$67,000**, and repayments will only apply to income **above** that threshold (formerly they applied to the entire 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 the 2025-26 year are now structured into marginal brackets:
- **15%** on income between $67,001 and $125,000
- **17%** on the portion of income above $125,000 up to $179,285
- **10%** of total income if it exceeds $179,285 (though not worse off under certain transition protections) ([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))
Also law now is a **20% reduction** to all study and training support loans in existence as of **1 June 2025**, retroactive before indexation. Indexation will be recalculated on the reduced balance. Most reductions are expected before end-2025 or early 2026, though complex cases may take longer. ([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))
## Examples of Impact
- *Example 1*: An individual with **$80,000** income. Under the old system, mandatory repayment might have been ~3.5% of full income ($80,000 → ~$2,800). Under new system, it's **15%** of amount over $67,000, i.e. 15% × $13,000 = **$1,950**, significantly lower.
- *Example 2*: A borrower with very high income ($200,000+): although marginal rates apply, protections ensure they’re not worse off than before.
## Actionable Steps for Loan Holders
1. **Update PAYG / instalment settings**: Employers should use new tax tables so less is withheld.
2. **Estimate repayment liability**: Use debt estimators to plan for repayments.
3. **Plan your lodgments and instalments**: If you pay via instalments, adjust calculations to account for lower repayments.
4. **Check loan balance reductions**: Ensure the 20% reduction has been applied; view your account for re-credits especially if your loan was in “more complex” category.
## Implications & Things to Watch
- Some people who previously made repayments now won’t need to if their income is below the new $67,000 threshold.
- Changes to withholding by employers may result in higher take-home pay for many earners.
- Delay in processing complex loan reductions could affect tax returns; keeping records will be important.
## Summary Table
| Person | Annual Income | Old Repayment | New Repayment |
|---|---|---|---|
| $80,000 | $80,000 | ~$2,800 | ~$1,950 |
| $50,000 | $50,000 | ~$1,750 | $0 |
| $200,000 | Very high | Protected & similar under new rules |
These reforms were designed to reduce burden on lower-income learners while ensuring loan repayment remains progressive and fair. Understanding the new regime will help people prepare accordingly.