The Albanese Labor Government will raise the minimum repayment threshold for student loans and cut repayment rates to make the repayment system fairer for all Australians with a student debt – around 3 million people.
From 1 July next year, the Government will reduce the amount Australians with a student debt have to repay per year and raise the threshold when people need to start repaying.
The reforms will apply to everyone who has a student debt, including all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loans.
The Government will lift the minimum repayment threshold from around $54,000 in 2024-25 to $67,000 in 2025-26 and introduce a system where repayments are based on the portion of a person’s income above the new $67,000 threshold.
For someone on an income of $70,000 this will mean they will pay around $1,300 less per year in repayments.
This will deliver significant and immediate cost of living relief to Australians with student debt, allowing them to keep more of their hard-earned money at a time when many are looking to save for a house deposit or start a family.
The move to a marginal repayment system is a recommendation of the Australian Universities Accord, and has been informed by the architect of the HELP system, Emeritus Professor Bruce Chapman.
This reform addresses one of the many unfair changes the Liberal Party made when they were in government to lower repayment thresholds.
Making repayment thresholds fairer
| Income Threshold | Compulsory repayment amount under proposed change per year | Reduction in compulsory payment per year |
| $60,000 | $0 | $600 |
| $70,000 | $450 | $1,300 |
| $80,000 | $1,950 | $850 |
| $90,000 | $3,450 | $600 |
| $100,000 | $4,950 | $550 |
| $110,000 | $6,450 | $700 |
| $120,000 | $7,950 | $450 |
| $130,000 | $9,550 | $200 |
| $140,000 | $11,250 | $650 |
| $150,000 | $12,950 | $550 |
| $160,000 | $14,650 | $550 |
| $170,000 | $16,350 | $650 |
| Above $180,000 | No change | No Change |
The Government is reforming the student loan system to make it fairer for young Australians.
We have already announced reforms to indexation that will make sure student debts don’t grow faster than average wages.
This reform also builds on the Government’s substantial tertiary education reforms, including:
- Delivering 500,000 Fee-Free TAFE places;
- Doubling the number of University Study Hubs;
- Introducing legislation to establish the Commonwealth Prac Payment, expand Fee-Free Uni Ready Courses; and
- A commitment to introduce a new managed growth and needs-based funding model for universities, and establish an Australian Tertiary Education Commission.
This change will be subject to the passage of legislation.