From today, $3 billion is being wiped from all student debt loans.
The Albanese Labor Government has fixed the way indexation is calculated on student debt and backdated this change to 1 June 2023.
People can check how much they've saved on their HELP debt by logging onto their ATO account through myGov.
This debt reduction will roll out over the next few weeks.
Someone with an average HELP debt of around $27,000 will see around $1,200 wiped from their outstanding loan.
We have capped the HELP indexation rate to the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI).
This will benefit all Australians with a student debt, fixing last year's spike in the indexation of 7.1 per cent and preventing indexation from outpacing wages in the future.
This means the 7.1 per cent spike in indexation in 2023 will be reduced to 3.2 per cent (based on the lower WPI), and credits provided via the ATO.
The indexation rate for 2024 will also be reduced from 4.7 per cent to 4.0 per cent.
This change applies to HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loans.
If someone has completely repaid their student debt after 2023 or 2024 indexation was applied, the credit has been processed as a refund to their bank account (assuming there are no outstanding government debts).
Estimated indexation credit for HELP debtors
| HELP DEBT at 30 June 2023 | TOTAL ESTIMATED CREDIT FOR 2023 AND 2024* |
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and 2024 will receive an indexation credit.
This is just the first stage of our reforms to make student debt fairer.
We're helping with the cost of degrees and the cost of living.
Next year, the Albanese Labor Government will cut a further 20 per cent off all student loan debts, raise the minimum repayment threshold for student loans and cut repayment rates.
To calculate how much your student debt could be cut by, visit https://www.education.gov.au/help-debt-reduction-and-repayment-estimators.
Quotes attributable to Minister for Education Jason Clare:
"The Albanese Government has wiped $3 billion in student debt from more than three million Australians.
"The Universities Accord recommended indexing HELP loans to whatever is lower out of CPI and WPI.
"We have done this, and gone further. We have backdated this reform to last year. This wipes out what happened last year and makes sure it never happens again.
"The ATO is now cutting these debts. You can log on to your MyGov account to check your student debt. This process will roll out from today.
"And there's more to come. If we win the election next year, Labor will cut all student debt by a further 20 per cent and make repayments fairer."
Comments attributable to Assistant Treasurer and Minister for Financial Services, Stephen Jones:
"The Albanese Government is helping Australians earn more and keep more of what they earn.
"This is welcome news for Australians who are doing it tough as we head into Christmas.
"We're helping Australians who are studying to get ahead by making sure that the system doesn't penalise them."
