Changes to Study and Training Loan Indexation: What You Need to Know

Changes to Study and Training Loan Indexation: What You Need to Know

If you have a study or training loan (such as a HELP or VET loan), you may have noticed how indexation affects your balance over time. Indexation is applied each year to adjust outstanding loan balances and recent legislative changes have altered how that indexation is calculated.

This page explains what indexation is, what has changed, which loans are affected, and what you should check now.

What is indexation and when is it applied?

Indexation is an annual adjustment applied to the portion of your study or training loan that has remained unpaid for more than 11 months. Indexation is applied on 1 June each year.

Indexation applies to Australian study and training support loans, including:

  • Higher Education Loan Program (HELP)
  • VET Student Loan (VSL)
  • Student Financial Supplement Scheme (SFSS)
  • Student Start-up Loan (SSL) and ABSTUDY SSL
  • Australian Apprenticeship Support Loan (AASL)

What has changed with study and training loan indexation?

Legislation was introduced to change the way indexation is calculated on study and training loans. Under the updated rules, indexation is now based on the lower of:

  • The Consumer Price Index (CPI), or
  • The Wage Price Index (WPI)

This change was backdated to apply from 1 June 2023, reducing the impact of large indexation increases that applied in recent years.

Adjusted indexation rates

As a result of the new method of calculation, the indexation rates for recent years were revised:

  • 1 June 2023: 3.2% (previously 7.1%)
  • 1 June 2024: 4.0% (previously 4.7%)
  • 1 June 2025: 3.2%

The ATO has applied these revised rates automatically to eligible loan accounts.

What will happen to my loan balance?

Where the revised indexation calculation results in a lower amount than was previously applied, the ATO adjusts the study or training loan balance.

For most people, this happens automatically. You do not need to lodge anything to have the change applied.

You can view your updated loan balance through ATO Online services or the ATO app.

Will I receive a refund?

If your study or training loan account ends up in credit after indexation adjustments or other changes, the ATO may issue a refund.

Any credit is first applied against other outstanding tax or Commonwealth debts. If there is still a remaining credit, it is refunded to your nominated bank account.

If your tax agent’s bank account is listed as the nominated account, the refund may be paid to the agent and then forwarded to you.

Related update: 20% reduction to student and training debts

In addition to indexation changes, legislation introduced a one‑off 20% reduction to eligible student and training support loan balances that existed on 1 June 2025.

This reduction was applied before indexation was calculated. Where this resulted in loan accounts being in credit, refunds have been processed after offsetting other government debts.

Short video explanation

This short video provides a quick overview of the changes and what borrowers should be aware of.

What you should do now (simple checklist)

  • Check your nominated bank account details in ATO Online services or the ATO app if you are expecting a refund.
  • Confirm whether the nominated bank account belongs to you or your tax agent, as this determines where any refund is paid.
  • Review your study and training loan balance through ATO Online services to confirm the current position.
  • Ensure your contact details are up to date so you receive ATO notifications about changes or refunds.

Need help understanding how this affects you?

If you have multiple income sources, investment losses, or want to understand how your study or training loan interacts with your overall tax position, reviewing this before tax time can help avoid surprises.

You can learn more about how we assist individuals through our
Individual Tax Services.