HECS-HELP debts to be cut by 20%

  • 23 July 2025
  • by BG Private
  • 1-minute read

Australia’s Labor government has announced a 20% reduction on HECS‑HELP debt, which will affect roughly 3 million Australians.

Timeline for implementation

  • 1 June 2025: The Australian Taxation Office (ATO) applied the usual indexation increase to student debt (based on CPI or Wage Price Index, whichever is lower). For 1 June 2025 it was 3.2%.
  • When Parliament reconvened on 22 July 2025, the government introduced the HELP debt reduction bill as its first priority.
  • After passing, the ATO will retroactively apply the 20% reduction to the debt balances as of 1 June, then recalculate and adjust indexation accordingly.
  • The ATO will automatically apply changes—borrowers don’t need to act. Updated balances (taking into account both the debt reduction and the adjusted indexation) will appear in your myGov.

Key point: If you paid off all of your loan before 1 June 2025, you won’t benefit from this reduction.

Contact us

If you have any questions relating to your HECS-HELP debt, contact your usual BG Private advisor or contact our Accounting team on +61 3 9810 0700 or

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