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)
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)
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)
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
- Update PAYG / instalment settings: Employers should use new tax tables so less is withheld.
- Estimate repayment liability: Use debt estimators to plan for repayments.
- Plan your lodgments and instalments: If you pay via instalments, adjust calculations to account for lower repayments.
- 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.