Going up? Your student loans have

Approximately 3 million Australians have study and training support loans and on June 1 the balance of these loans has increased by the highest rate seen in at least 10 years.

Study and training support loans include:

  • Higher Education Loan Program (HELP)
  • VET Student Loan (VSL)
  • Student Financial Supplement Scheme (SFSS)
  • Student Start-up Loan (SSL)
  • ABSTUDY Student Start-up Loan (ABSTUDY SSL)
  • Trade Support Loan (TSL)

Whilst no interest is charged on these loans, indexation is added to these debts annually.
The role of indexation is to maintain the real value of the loan by adjusting it in line with
changes in the cost of living, also known as inflation, as measured by the Consumer Price
Index (CPI). Indexation is added to the part of an accumulated study and training loan that
has remained unpaid for more than 11 months.

In 2023, the indexation rate was 7.1%, this equates to an increase of $1,759 for people with
an average debt of $24,770. This is concerning for individuals whose compulsory repayment
rate is significantly lower than indexation.

For example, if an individual had a loan balance of $35.000, their loan increased by $2,485
on June 1. If this same individual’s repayment income for the 2023 year is $60,000,
requiring a compulsory repayment of $1,500, the balance of their debt has increased by

Compulsory repayments of study and training support loans are made through the income
tax system. If you have a loan when you lodge your tax return, and your repayment income
is above the minimum repayment threshold the ATO will calculate your compulsory
repayment and include it on your notice of assessment.

If you are working, you must advise your employer if you have a study and training support
loan. Your employer will use the Pay As You Go (PAYG) withholding system to withhold
amounts from your pay throughout the tax year, to assist in covering the compulsory
repayment amount calculated when you lodge your tax return.



Emma Russoniello