Bill to reduce student debt now law

Written By Aspect Accountants

Legislation has recently been enacted which delivers on the 2025/26 Federal Budget announcement to reduce student debts. 

Pursuant to this legislation:

  • there is a one-off 20% reduction (credit) to Higher Education Loan Program debts and other student loans that were incurred on or before 1 June 2025;

  • the minimum repayment threshold is increased from $54,435 in the 2024/25 income year to $67,000 in the 2025/26 income year (to continue to increase each year with the growth in wages); and

  • a marginal repayment system is introduced where compulsory student loan repayments are calculated only on income above the new $67,000 threshold (rather than having it based on a percentage of the repayment income). 

Aspect Accountants
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