20% HELP (formerly HECS‑HELP) debt reduction in Australia:

Status: Legislation Passed

• The Albanese Government’s Universities Accord (Cutting Student Debt by 20 per cent) Bill 2025 has successfully passed through Parliament, including the Senate, on 31 July 2025.

• Royal Assent is expected shortly, completing the legal process.

📌 What It Means for You

20% Debt Reduction

• The HELP (HECS‑HELP, FEE‑HELP, VET Student Loans, and other eligible schemes) debt as it stood on 1 June 2025, before indexation, will be cut by 20%.

• No action required on your part—the Australian Taxation Office (ATO) will automatically apply the reduction once legislation is official.

Indexation Adjustment

• On 1 June 2025, the standard 3.2% indexation rate (capped at CPI or WPI) is applied to your loan balance.

• After the legislation passes, the 20% reduction is applied retroactively, and then indexation is recalculated based on the reduced balance.

• For example: if you owed $30,000 on 1 June 2025, you’d first receive a $6,000 cut, then indexation applies to the remaining $24,000, bringing it to $24,768 (effectively around a 17.4% net cut)    .

Timeline of Events

• 1 June 2025: ATO applies indexation (~3.2%) under regular schedule.

• 22 July: Parliament resumed. Debt reduction legislation introduced as government’s first bill.

• 31 July 2025: Parliament passed the bill.

• Soon thereafter: Royal Assent and ATO implementation, expected over the following weeks/months.

How You’ll See It

• Once changes are processed, the ATO will notify you (e.g., via SMS or official communication).

• You can view your updated HELP debt balance on myGov under ATO Online Services.

Summary Table

Detail What Happens

Debt as at 1 June 2025 Eligible HELP debts will be reduced by 20%, based on the outstanding balance that day

Indexation Applied on 1 June at ~3.2%, then recalculated after the reduction

Your Action None required – changes are applied automatically

Notification & Timing Passed 31 July 2025, notifications and updates expected over the subsequent months

Check your Balance Via myGov > ATO Online Services after implementation

What If I Paid Off My Debt?

• If you paid off your outstanding loan before 1 June 2025, you won’t receive the 20% reduction or a refund. You’re ineligible for that part of the measure.

• If you paid off your debt after 1 June 2025 but before the legislation takes effect, you may receive a refund or credit equivalent to the amount if no Commonwealth debt is owed.

If you had an eligible HELP debt on 1 June 2025, you will receive a 20% automatic reduction, applied retroactively once legislation is finalised. The ATO will adjust any early indexation accordingly and send confirmation when complete, allowing you to view your reduced balance in myGov.