All student and training support debts as of 1 June 2025 will receive a 20% reduction. Each account is reduced separately, and you don’t need to take any action—the reduction will be applied automatically.

What to expect: Most reductions should be completed by the end of 2025. Once the reduction is applied, you’ll be notified via SMS, email, or your myGov Inbox. To make sure you receive this notification, check that your contact details are up to date in your myGov account.

The 2025 indexation (interest applied to your debt) will be recalculated on the reduced debt balance, so your remaining loan will reflect the reduction immediately.

Refunds for Loans in Credit

If your loan goes into credit after the reduction, you may be eligible for a refund. Any credit will first be applied to outstanding tax or other Commonwealth debts. Refunds are processed automatically and should arrive by January 2026.

If you made a compulsory repayment after 1 June 2025, the ATO will adjust your assessment and refund any overpaid amount. Refunds are sent to your nominated bank account, so make sure your bank details are up to date in myGov. If your tax agent’s account is listed as your nominated account, your refund will be sent via them.

Changes to Compulsory Repayments

From 1 July 2025, compulsory repayment rules changed:

• The minimum repayment income increased to $67,000 (up from $54,435).

• Compulsory repayments are now calculated only on income above this threshold.

• High earners (over $179,286) will see no change.

• For most people, this means less tax is taken from your pay throughout the year.

Example:
If your repayment income is $80,000, previously your repayment would have been calculated on the full $80,000. Now, repayments are only calculated on the $13,000 above the $67,000 threshold, meaning your compulsory repayment is lower and your pay is higher each fortnight.

If you pay your tax via instalments, these changes will apply from 1 July 2026, and any overpaid amounts in the 2025–26 year will be refunded in your 2026 assessment.

Voluntary Repayments

You can still make voluntary repayments at any time to reduce your debt faster. Voluntary payments are applied directly to your balance, which can reduce future indexation charges.

Check Your Account

You can view your updated loan balance using the ATO app or ATO online services. Make sure your contact and bank details are current to avoid delays with notifications or refunds.