Starting today many Australians who have student debt will get more money in their paychecks. The government made big changes to how student loans are paid back. They made the rules easier to understand & raised the income level where people need to start paying. The new system is more fair because it uses different rates based on how much you earn. This means most people can keep more of their salary each month. The updates to HECS-HELP will help lots of students & graduates manage their money better. These changes show how the government wants to make student loan payments less stressful for everyone.
New 2025–26 HECS Repayment Thresholds
– You don’t need to pay anything if you earn less than $67,000 per year.
– If you make between $67,000 and $125,000 you will pay 15 cents for every dollar above $67,000.
– For earnings between $125001 and $179,285 you will pay $8700 plus 17 cents for each dollar above $125,000.
– Anyone earning $179,286 or more will pay 10% of their total income.
This new system is simpler than the old one which had 19 different payment levels. Your employer will start using these new rates from September 24 2025.
20% Reduction in Student Debt
The government will reduce all student loan balances by 20%. This applies to loans that existed on June 1 2025 before any interest was added.
– You don’t need to do anything because the tax office will handle this automatically.
– Most people will see their loan balance drop by the end of 2025.
– This means students & graduates could save thousands of dollars on their loans right away.
Government’s Reason for HECS Update
The government wants to help students with their money problems. Treasurer Jim Chalmers explained that they will reduce student loans. This will make life easier for young people & make loan payments more reasonable. Education Minister Jason Clare supported this plan. He said young people will have more money to spend when they most need it.
New HECS Repayment Rules in One Look
– Student loan payments are changing for the better.
– You won’t need to make payments until you earn $67000 per year.
– The new system makes repayments more fair by using different rates based on your income.
– People with student loans will save about $680 each year on average.
– There’s also good news coming in 2025 when loan balances will drop by 20%.
– Your employer has already started using these new payment rates in your paycheck.
These changes will make student loans easier to handle for many people.
