Compliance
Your Study Loan Repayments Just Got Easier: Key Loan Changes You Need to Know
Legislation has enacted major changes to how study and training loans are repaid in Australia—learn what’s new, who saves, and what you need to do.
By NomadicTax Research Team • 5-8 min read • May 9, 2026
## What Has Changed?
- As of **1 July 2025**, the minimum threshold for **compulsory repayments** rises 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))
- The repayment system has shifted to a **marginal repayment model**: instead of applying a single flat percentage on your total income, repayments are now calculated **only on income above $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))
- A **20% debt reduction** was applied to all study and training support loans existing as of **1 June 2025**, before indexation. ([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))
- Indexation of your study loan debt will now be based on **CPI or WPI—whichever is lower**. ([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 Benefits Most
- Those with smaller debts or incomes just over the old threshold will see savings fast.
- Middle income earners (e.g. $80,000–$120,000) benefit significantly, as repayments are now only on income **above $67,000**, rather than on the full amount.
- Older students or those with long-term loans may benefit from the 20% reduction and from the lower indexation basis.
## Practical Examples
- **Grace**, earning $80,000 in 2025–26: under old system she’d repay a flat percentage on full income; now she repays **15% only on the $13,000 above $67,000**, i.e. $1,950, not the larger old amount. ([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))
- If after the 20% reduction and lowered indexation, your loan is in **credit** (due to prior payments), you may receive a **refund**, provided you have no outstanding federal debts. ([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/tax-professionals-newsroom/study-and-training-support-loan-changes-are-now-law?utm_source=openai))
## What You Should Do Now
- **Check your loan account**: verify that your lender / ATO has correct bank details so refunds can be processed automatically. Updated account info can help. ([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/tax-professionals-newsroom/study-and-training-support-loan-changes-are-now-law?utm_source=openai))
- **Advise employees or clients**: if PAYG withholding was adjusted or could be varied due to lower repayment obligations, talk to your payroll contact or an advisor.
- **Lodge tax returns on time**: Even though the 20% reduction is backdated, lodging your 2025 return as normal ensures you benefit. ([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))
## Compliance and Timing Insights
- The new rules (thresholds, marginal repayments, debt reductions) are now **law**. ([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/tax-professionals-newsroom/study-and-training-support-loan-changes-are-now-law?utm_source=openai))
- The updates to **PAYG withholding schedules** will come later so that employers and agents can incorporate the changes. For some clients, this means more cash -- less being withheld upfront. ([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/tax-professionals-newsroom/study-and-training-support-loan-changes-are-now-law?utm_source=openai))
- Note: **instalment rates** (for those paying by instalments) will only change from **2026-27**. ([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/tax-professionals-newsroom/study-and-training-support-loan-changes-are-now-law?utm_source=openai))
---
These changes lighten the financial load of many Australians with study debts. Plan ahead to take advantage, especially if your income or loan balance is close to key thresholds.